Romgaz, Duro Felguera agree to complete Iernut power plant project

Romgaz also endorsed the conclusion of an agreement with Duro Felguera that will settle disputes between the two parties and support the completion of the remaining works at the Iernut plant, the natural gas producer said in a statement filed with the Bucharest Stock Exchange.

The settlement agreement will take effect within five days of fulfilling the conditions precedent tehereof, one of which entails obtaining approval from Romgaz shareholders.

By October 2021, 80% of the Iernut power plant had been completed, Romgaz said in a press release at the time.

Works on the power plant were delayed due to disputes between Romgaz and the contractor, a consortium comprising Duro Felguera and Romania's Romelectro. In June 2021, Romgaz said its contract with the tie-up was cancelled because the consortium had failed to complete the works in time. Romgaz first terminated the contract in April 2021 but subsequently suspended the termination notice four times in order to continue negotiations with the consortium.

In June 2017, US-based General Electric announced that it was awarded an order from the Duro Felguera - Romelectro tie-up for core technology at the Iernut power plant. Unveiled in 2016, the project in the Mures county requires investment of 269 million euro ($292.3 million), of which majority state-owned Romgaz is covering 75% and the government is contributing 25%.

Duro Felguera specialises in the execution of engineering, procurement and construction (EPC) or turnkey projects and the provision of services in the energy and industrial 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 70% owned by the Romanian state, with the remaining balance in free float on the Bucharest Stock Exchange.

Romgaz shares traded 1.05% higher at 38.6 lei ($8.5/7.8 euro) as at 1443 CET on the Bucharest bourse on Thursday.