March 17 (SeeNews) - Romanian oil and gas company OMV Petrom [BSE:SNP] said that it signed a contract worth approximately 276 million euro ($292.8 million) for the delivery of natural gas with the national gas transmission system operator Transgaz [BSE:TGN].
The contract was concluded for a sixteen-year period, from September 2026 to September 2042, and its estimated value is based on the transport tariffs applicable at the current date, OMV Petrom said in a statement filed with the Bucharest Stock Exchange, BVB, on Thursday.
Based on the deal, Transgaz will build of a new pipeline worth an estimated 500 million euro spanning over 300 km, prime minister Nicolae Ciuca said in a televised statement following the contract signing ceremony.
In a separate statement filed with the BVB on Thursday, Romanian natural gas producer Romgaz [BSE: SNG] said that its subsidiary Romgaz Black Sea Limited concluded a transmission framework agreement with Transgaz for the transportation of natural gas to be produced from the Neptun Deep offshore project, to the NTS.
“The signing of the document by Transgaz, OMV-Petrom and Romgaz is the firm commitment for the development of the Tuzla-Podisor gas pipeline and for the final investment decision estimated at 4 billion euro, expected in the summer of this year,” Ciuca added.
In March 2022, Romgaz signed the contract for the acquisition of Exxon Mobil Mobil’s 50% stake in the Neptun Deep project for $1.06 billion, consequently partnering with OMV Petrom to unlock natural gas resources in the Black Sea. Following the acquisition, Romgaz changed the name of the ExxonMobil Exploration and Production subsidiary to Romgaz Black Sea Limited, it said in a statement filed with the BVB at the time.
The deal stipulates that the natural gas will be delivered from the Neptun Deep block in the Black Sea to the NTS, through the Tuzla entry/exit NTS point. The signing of the contract followed the successful completion of the incremental capacity booking procedure for the Tuzla entry/exit NTS point.
“We believe the Black Sea holds a significant potential for natural gas and Neptun Deep is a strategic project for OMV Petrom and for Romania. It is at the core of our Strategy 2030 and will play an essential role for Romania's energy security. We are planning the final investment decision for mid-2023, with the production to begin in 2027," Christina Verchere, OMV Petrom CEO, said.
OMV Petrom became the operator of the Neptun Deep offshore project in August 2022 and submitted the declaration of commerciality for the field at the end of the year. The company is currently progressing with the tendering process, permitting, as well as other technical topics.
OMV Petrom shares traded 1.65% higher at 0.493 lei ($0.1063/0.1002 euro) as at 0906 CET on the BVB on Friday. Transgaz shares rose 1.6% to 317 lei by 0906 CET, while Romgaz shares traded 1.61% higher as at 0902 CET on Friday on the Bucharest bourse.
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