$4.4 billion investment on the cards for ‘largest natural gas project’ in Romania’s Black Sea

South-Eastern Europe’s integrated energy company OMV Petrom and Romgaz, Romania’s producer and main supplier of natural gas, have made a final investment decision for a giant deepwater natural gas project in the Black Sea, which is considered to be not only Romania’s first deepwater project but also “the largest natural gas project” in the Romanian area of the Black Sea.

OMV Petrom disclosed on Wednesday, 21 June 2023, that it had approved, together with Romgaz, the development plan for the Domino and Pelican South commercial natural gas fields in the Neptun Deep block offshore Romania. This will be submitted to the National Agency for Mineral Resources for endorsement. The first gas is expected in 2027 and the production at the plateau will be approximately 8 bcm annually (about 140,000 boe/d) for almost 10 years.

Christina Verchere, CEO of OMV Petrom, commented: “With the final investment decision for the Neptun Deep project, we are opening a new game-changing chapter for the Romanian energy sector. Together with our partner, Romgaz, we are entering the development phase of the first deepwater offshore project in Romania. The project will contribute to Romania’s economic growth and will strengthen the country’s energy security.

“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. It is also a major step forward for our Strategy 2030 that aims at supporting the energy transition in Romania and in the region.”

While OMV Petrom is the operator with a 50 per cent interest in the project, Romgaz is the firm’s partner in this project and holds the remaining 50 per cent. The two players intend to invest up to 4 billion euros or almost $4.4 billion for the development phase of the project to be spent mostly during 2024-2026, which will enable about 100 bcm of natural gas to be brought on stream, turning Romania into – what OMV Petrom deems to be – the largest gas producer in the EU and a net natural gas exporter.

Razvan Popescu, General Manager of Romgaz, remarked: “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 decarbonisation. Starting with 2027, we will have a new source of natural gas, which has the potential to significantly increase the country’s natural gas production. We are proud to be part of an innovative project, which will bring significant benefits to the country, in the long term.”

Furthermore, the infrastructure required for the development of the Domino and Pelican South offshore natural gas fields includes ten wells, three subsea production systems, associated flow lines, an offshore platform, the main natural gas pipeline to Tuzla, and a natural gas measurement station.

According to OMV Petrom, the platform generates its own energy, operating at the highest standards of safety and environmental protection. The entire infrastructure will be operated remotely, through a digital twin, allowing for process optimisation and contributing to the improvement of environmental performance, by making energy consumption more efficient and reducing emissions.

Aristotel Marius Jude, Romgaz Deputy CEO, stated: “The Neptun Deep project enters today a new phase, the decision to invest in the development of the fields in this perimeter is a historic one for all interested parties and will bring undeniable benefits to Romania’s energy security and independence.

“We remain committed to achieving the objectives of this project and we are confident that the National Agency for Mineral Resources will confirm, as soon as possible, the development plan for the Domino and Pelican South commercial fields in the Neptun Deep block, from which point the development stage of these fields will effectively start.”

Located at about 160 km from the shore, in waters between 100 and 1,000 metres, the Neptun Deep block in the Black Sea covers an area of ​​7,500 square km. Since 2008, the exploration activities in the Neptun Deep block have included two 3D seismic acquisition campaigns and two exploration drilling programmes.

The first natural gas discovery at the block was made in 2012 and the total exploration and appraisal expenses to date amount to more than 1.5 billion euros or close to $1.64 billion. The carbon footprint of this project is expected to be better than the industry benchmark, as at plateau production, a carbon footprint of around 2.2 kg CO2/boe is anticipated which is below the industry average of 16.7 kg CO2/boe as per IOGP.