December 30 (SeeNews) - Romanian natural gas producer Romgaz [ BSE:SNG] said on Wednesday it would not extend the term for completion of the construction of a combined cycle gas turbine power plant in Iernut sought by the contractor of the project, a consortium of Duro Felguera and Romelectro.
Romgaz decided against the extension because the work completion term stipulated in the public procurement contract has not been met and expired on December 26, it said in a statement filed with the Bucharest Stock Exchange, BVB.
"Romgaz will identify the necessary solutions to complete and commission Iernut Power Plant and will continue to inform the capital market regarding this investment," the company said, without elaborating.
In June 2017, US-based multinational conglomerate General Electric announced that it was awarded an order from the consortium Duro Felguera - Romelectro for core technology in the Iernut power plant in Mures county. With a planned installed capacity of 430 MW, the Iernut project is expected to be Southeast Europe’s largest gas project in five years, Romgaz said at the time.
At the beginning of November, Romgaz received 115 million lei ($27.6 million/ 23.6 million euro) from the energy ministry, representing the second tranche of a government grant for the Iernut project. The financing contract for the project was concluded in 2017, with the ministry committing to offer Romgaz a grant of up to 320.9 million lei. In June 2018, Romgaz received the first tranche of the grant in the amount of 20.99 million lei.
Announced in 2016, the project requires a total investment of 269 million euro ($314.5 million) of which Romgaz is covering 75% and the state is contributing 25%.
Duro Felguera is a Spanish company specialised in the delivery of turnkey projects for the energy, mining and handling, oil and gas, smart control systems, communications, security and defence sectors.
Romelectro is a private Romanian company acting as a contractor and having more than 45 years of international experience in the energy area.
Romgaz is the largest natural gas producer in Romania and one of the largest in Eastern Europe, responsible for producing around 40% of the natural gas used in Romania. It is 70% owned by the Romanian state, with the balance of 30% in free float on the BVB.
Shares in blue-chip company Romgaz traded flat at 28.15 lei by 1458 CET on Wednesday on the BVB.
(1 euro=4.8744 lei)
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