Romania: TPP Iernut termination of contract suspension extended for the fifth time

, SEE Energy News

This time the negotiations are extended until 16 June – for the fifth time, Romanian natural gas producer Romgaz has extended, by another two weeks, the suspension of the notice of termination of the contract concluded with a consortium of Spanish Duro Felguera and local Romelectro for the construction of a gas unit at thermal power plant Iernut.

The decision to extend the suspension of the notice of termination was taken following the letter from the contractor, requesting a further extension of the term of suspension of the notice of termination, in order to negotiate and agree on a solution to ensure the completion and implementation of the investment objective, in the shortest possible time. In early April, Romgaz said that it has decided to temporary suspend the termination of contract for the construction of a gas-fired unit at thermal power plant Iernut with the aforementioned consortium. The statement from the company said that it has suspended for 14 days the notice on the contract’s termination at the consortium’s request. Within that timeframe, , the consortium will submit a proposal about finalizing the works and putting the plant into operation as soon as possible. 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.