February 26 (SeeNews) - Oil and gas exploration company Serinus Energy said it has filed a suit against two subcontractors for delivering defective equipment for its Moftinu gas plant in Romania.
The lawsuit has been initiated against Aval Engineering Inc. of Alberta and Kocken Energy Systems Incorporated of Nova Scotia and some of their directors and officers, Serinus Energy said in a statement on Monday.
"The suit claims more than $25.4 million (22.3 million euro) in damages for chronic mismanagement as well as misappropriation of funding provided by Serinus which resulted in repeated failures to deliver the completed and tested Low Temperature Separation and Triethylene Glycol units needed to complete the company's gas conditioning plant on the Moftinu site in Romania," Serinus said.
The two units were originally contracted to be delivered in January 2018 but they were shipped from Canada to Romania on January 16, 2019. They arrived in Romania on January 28 and were then taken to the fabrication yard of the project's EPC contractor Confind, for inspection and testing prior to shipment to site. During inspection, it was discovered that the units were not properly fabricated, including various parts being missing.
Serinus and Confind have been working diligently to rectify this and complete final assembly at the Confind fabrication yard, the company said.
"The completion, testing and certification of the units are expected to take two weeks from today subject to the revelation of no further issues whilst testing the units," Serinus said in an operational update on Tuesday, adding that subject to procurement and testing it expects the units to be moved to the Moftinu gas plant in the first half of March.
In December, Serinus Energy announced it has signed a gas sales agreement with Vitol Gas and Power BV for part of its future output from the Moftinu project. The agreement targets gas quantities which are not required to be sold on a centralised market.
The Moftinu gas field, discovered by Serinus in 2014, is the catalyst for future, self-funded, growth in the Satu Mare concession, according to the company. Satu Mare is a 729,000 acre exploration block which is 60% owned and operated by Winstar Satu Mare SRL, a wholly owned subsidiary of Serinus.
Serinus is an international upstream oil and gas exploration and production company with a diversified portfolio of projects in Tunisia and Romania. The common shares of the company are traded on the stock exchanges in Warsaw and Toronto.
($ = 0.8799 euro)