Romgaz Gets 2nd Tranche of State Funds for Power Plant

Romania's state-owned gas producer Romgaz said on November 4 it had received the second, lei 115mn ($28mn) tranche of state funding for the construction of a combined-cycle gas turbine (CCGT) power plant in Iernut.

Romania's energy ministry granted the company a total of lei 320.9mn in 2017 under the National Investment Plan, aimed at expanding the country's power generation capacity and making it cleaner. Romgaz received a lei 20.9mn first tranche in June 2018.

The 430-MW Iernut CCGT plant in central Romania was due online in the first quarter of this year, but its launch was pushed back to the second quarter and then to the end of this year. Spanish developer Duro Felguera and domestic firm Romelectro are the project's lead contractors, while its turbines have been supplied by General Electric.

Romania produces around 20-25% of its electricity from gas and around the same amount from coal. But some of its coal-fired capacity is facing closure because of stricter EU emissions standards coming into force and the mounting cost of EU carbon permits. The government wants to replace some of this capacity with gas-fired generation.

Romgaz, which is 70% state-owned, signed a memorandum in September with services firm Grup Servicii Petroliere (GSP) on developing a 150-MW gas plant and a 50-MW solar plant in the country's southwest.

Romania currently relies on a mix of domestic and Russian gas supply to cover its needs. But domestic production has stagnated over the last decade. The country had hoped to become a net exporter of gas by developing several large Black Sea discoveries, but only one of these projects, Midia, has been sanctioned.

A final investment decision on Romania's largest offshore find, Neptun Deep, is still pending, and operator OMV Petrom has complained that recent changes in Romanian tax and regulation have made the project unfeasible.