Romania orders construction of pipeline to Neptun Deep gas offshore project

Romania has given the green light to start construction of a long-awaited gas pipeline that will link the country’s top offshore gas development, Neptun Deep, with the country’s gas transmission network, as well as deliver natural gas imported from other sources to the southern part of the country.

Romania’s state gas transmission operator Transgaz said it had earlier awarded the construction job for the 308-kilometre pipeline to a building subsidiary of Turkey’s Kalyon Group, a large conglomerate of the country’s business interests in the construction and renewable energy sectors.

The project, known as Tuzla—Podisor, consists of a shorter 32-kilometre offshore segment that will take future gas production from Neptun Deep to shore.

A longer onshore segment will extend from the settlement of Tuzla on the Black Sea shore via the south region of Romania and will terminate to the west of the country’s capital Bucharest, near the town of Podisor.

Transgaz said that in Podisor, the sanctioned pipeline will link to another pipeline project, known as BRUA, that will link Bulgaria, Romania, Hungary and Austria in three construction phases to improve the availability of gas to consumers in these countries.

The operator said that the two pipelines, Tuzla—Podisor and BRUA, may eventually transport up 15 billion cubic metres per annum of natural gas that will be imported from Azerbaijan’s Caspian offshore developments and from liquefied natural gas terminals in Turkey and Greece.

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On its way to Podisor, the Tuzla—Podisor pipeline will also cross the Trans-Balkan pipeline, a legacy network that links Ukraine, Moldova, Romania, Bulgaria and Turkey. This system remains heavily underutilised after the end of 2019 when Russian gas giant Gazprom started operations of an alternative gas connector to Turkey and South Europe, known as TurkStream.

Transgaz said that construction of the Tuzla—Podisor pipeline is backed by gas transmission contracts it signed earlier this year with Neptun Deep shareholders, OMV Petrom and Romania’s state gas producer Romgaz.

OMV Petrom, a subsidiary of Austria’s OMV Group, holds a 50% stake in the development, with Romgaz having the remaining interest.

The operator filed for a declaration of commerciality for the offshore field last December. Neptun Deep holds estimated recoverable reserves of between 42 billion and 84 Bcm of gas, in water depths of up to 1700 metres.

The construction of the Tuzla—Podisor pipeline has been on hold for almost two years in anticipation of OMV-Petrom’s decision to move forward with Neptun Deep, as the company had not been ready to commit to the project following adverse changes to taxation in Romania that were only removed last year.

Out of required pipeline investments of about €500 million ($550 million), some €85 million of funding has been received from the EU Modernisation Fund, with the remaining financing “covered by a competitive financing mix”, Transgaz said.

Construction is expected to take two years, the operator said earlier.