Romania's Transgaz, BSOG proceed with MGD gas delivery project

Romanian gas transmission company Transgaz [BSE:TGN] and Black Sea Oil & Gas have signed an agreement to build a 24.37 km pipeline that will feed gas from Black Sea wells into the system, the economy ministry said.

The agreement envisages the construction of a pipeline in the direction of Corbu - Sacele - Cogealac - Gradina that will bring gas from Midia Natural Gas Development Project (MGD Project) into the National Transmission System (NTS), the economy ministry said in a press release.

The estimated completion date is 2021.

"This project will cover 10% of Romania's annual natural gas needs. It is the result of an investment that has so far amounted to $200 million, and a further $400 million are to be invested by Black Sea Oil & Gas until construction is completed," economy minister Niculae Badalau said.

The MGD project consists of 5 offshore production wells (1 subsea well at Doina field and 4 platform wells at Ana field), a subsea gas production system over the Doina well which will be connected through an 18 km pipeline with a new unmanned production platform located over Ana field.

A 126 km gas pipeline will link the Ana platform to the shore and to a new onshore gas treatment plant in Corbu commune, Constanta county, with a capacity of 1 billion cubic metres per year representing 10% of Romania’s consumption. The processed gas will be delivered into the NTS operated by Transgaz.

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It is estimated that gas production will begin in the first quarter of 2021.

Black Sea Oil & Gas (BSOG), owned by Carlyle International Energy Partners and the European Bank for Reconstruction and Development, is a Romania-based independent oil and gas company, targeting exploration and development of conventional oil and gas resources. The company’s current portfolio is made up of XV Midia Shallow Block and XIII Pelican Block concession in the Romanian Black Sea where it is the operator and holds a 65% interest.

Transgaz' shares traded 0.42% higher at 3525 lei as at 1453 CET on Friday on the Bucharest Stock Exchange.