OMV Petrom SA and Romgaz SA have agreed to develop a natural gas block off Romania in the Black Sea, expecting a total production of about 3.53 trillion cubic feet (100 billion cubic meters).
OMV Petrom, which is majority held by Austrian primarily state-owned OMV Group, and Romania’s majority stated-owned Romgaz will invest up to $4.4 billion (EUR 4 billion) for the Neptun Deep block, they said in a joint press release Wednesday.
Expected to come on stream 2027, Romania’s first deepwater offshore project will make the country the biggest gas producer in the European Union, the companies said. Daily output is projected to be approximately 140,000 barrels of oil equivalent (boe), with recovery expected to last 10 years.
“To give an example of the project’s size: the estimated natural gas production is equivalent to ~30 times the current annual demand of ~4,300,000 households”, OMV Petrom chief executive Christina Verchere said in the announcement.
Spanning 2,895.77 square miles (7,500 square kilometers) Neptun Deep is the biggest natural gas development in the southeastern European nation, according to Romgaz. It sits some 99.42 miles (160 km) from the shore and has water depths of around 3,280.84 feet (1,000 meters), Romgaz said.
Development involves the Domino and Pelican South fields with a planned 10 wells. The project also includes three subsea production systems, a pipeline and an offshore platform.
“The entire infrastructure will be operated remotely, through a digital twin. This allows for process optimization and will contribute to the improvement of environmental performance, by making energy consumption more efficient and reducing emissions”, the release stated.
OMV Group said in a separate announcement the project’s carbon footprint is forecast to be better than the benchmark of the International Association of Oil & Gas Producers (IOGP). Emissions at plateau production are expected to be 2.2 kilograms per boe, “significantly below the industry average of 16.7 kg CO2/boe as per IOGP”.
The project starts work immediately after the development plan is approved by the National Agency for Mineral Resources, according to the media statement.
"Neptun Deep is a strategic project for Romania and for the region from the perspective of ensuring the natural gas needs and from the perspective of decarbonization”, Romgaz general manager Razvan Popescu commented.
ExxonMobil Exit
Last year Exxon Mobil Corp. announced it was giving up its stake in Neptun Deep with the sale of its Romanian upstream unit ExxonMobil Exploration and Production Romania to Romgaz for over $1 billion.
“The agreement includes all shares in ExxonMobil Exploration and Production Romania along with interest in the XIX Neptun Block offshore Romania. Operatorship on the block will transfer to its other titleholder, OMV Petrom”, the Texas state-based global energy giant said May 3, 2022.
ExxonMobil indicated costs had driven the decision. “ExxonMobil continues to evaluate our portfolio of opportunities, focusing our investments in advantaged assets with a low cost of supply,” president for upstream Liam Mallon said.
“Our investments to date have positioned the Neptun Deep project for future success with potential to help increase resource production within Romania and the European Union.”
Black Sea Supply Network
Romania has entered pipeline development projects involving European neighbors targeting to exploit gas in the Black Sea.
Last week its state-owned Transgaz SA awarded construction rights for the Tuzla-Podisor pipeline to a Turkish company.
The 188.46-mile (303.3 km) project will link Neptun Deep to another gas conveyor running across Austria, Bulgaria, Hungary and Romania, called the BRUA Pipeline.
The Tuzla-Podisor pipeline will help carry 529.72 billion cubic feet (15 billion cubic meters) of natural gas from terminals in Turkey and Greece to Romania and the Caspian Sea region, Transgaz director-general Ion Sterian said in a company announcement Friday.
Kalyon Insaat Sanayi Ve Ticaret Anonim Sirketi has won the $546 million (EUR 500 million) build contract for the Tuzla-Podisor project.
BRUA is part of efforts to diversify Europe’s gas sources and like the Tuzla-Podisor project has been funded by the European Union-affiliated European Bank for Reconstruction and Development (EBRD) as an EU Project of Common Interest. BRUA “would allow access to the future major gas infrastructure projects such as TAP [Trans-Adriatic Pipeline], gas sources from Central European gas hubs and potential gas transportation from Black Sea deposits”, the EBRD says on its website.
The first phase was completed 2020.
Stretching about 818.97 miles (1,318 km), BRUA runs from Bulgaria to Austria via Romania and Hungary.
Transgaz is also part of an agreement inked April between Azerbaijan and EU members Bulgaria, Hungary, Romania and Slovakia for gas distribution to the 27-member bloc. The memorandum of understanding for the so-called Solidarity Ring initiative provides for gas transfers from the State Oil Company of the Azerbaijan Republic via existing infrastructure, separate press releases from parties to the pact said April 24.
Deliveries will be via pipeline networks of Bulgaria's state-owned Bulgartransgaz EAD, Hungary's FGSZ Ltd., Transgaz and Slovakia's government-owned Eustream.
To contact the author, email jov.onsat@rigzone.com
What do you think? We’d love to hear from you, join the conversation on the Rigzone Energy Network.
The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.