Romania: Romgaz terminated construction contract for gas unit at TPP Iernut

, SEE Energy News

The reason for the termination of contract is the non-execution of the contractual obligations within given deadlines.

Romanian natural gas producer Romgaz has officially terminated contract for the construction of a gas-fired unit at thermal power plant Iernut with a consortium of Spanish Duro Felguara and Romanian Romelectro.

In February, Romanian Minister of Energy Virgil Popeascu said that the project for the construction of a gas-fired unit at TPP Iernut, which broke several deadlines and is still not finished, is a failure of former management of state-owned gas producer Romgaz. He said that the Government must do all it can to ensure the completion of the project by the end of 2021, at the same time criticizing Romgaz on the selection of a contractor for gas-fired unit. In late 2020, Romgaz said that it would not grant an extension of the deadline for the completion of the construction of a gas-fired unit at the existing TPP Iernut, which was proposed by project’s contractors – Spanish Duro Felguera and local Romelectro. The agreed deadline for the completion of the project expired on 26 December. The statement from Romgaz said that it will identify the necessary solutions to complete and commission the combined cycle unit at Iernut and will inform of its decision at a later date. In November 2016, Romgaz has concluded an agreement worth 268 million euros (without VAT) with a consortium of Spanish company Duro Felguera and Romanian Romelectro for a turnkey project for the construction of new 430 MW gas-fired power plant within its Iernut thermal power plant. The deadline for the completion of the new combined cycle power plant is 36 months from the effective date of the contract, which shall be within 5 working days from the date the NIP financing is approved. Romgaz took over Iernut thermal power plant in 2013 from Bucharest-based thermal energy producer ELCEN in exchange for deleting a 145 million euros debt. Initially, the plant was supposed to be commissioned in early 2020, but delays have arisen, both as a result of disagreements between partners regarding the provisions of GEO 114/2018 and regarding the increase in construction costs. In May, Romgaz CEO Adrian Volintiru said that the unit will be commissioned by the end of 2020.