The development of the Neptun Deep project requires investments of up to 4 billion euros – costs to which the two partners, OMV Petrom and Romgaz, will contribute equally. The gas production from the project is estimated at around 100 billion cubic meters of natural gas – as much as Romania’s consumption for 10 years, claims Cristian Hubati, member of the OMV Petrom directorate, responsible for the Exploration and Production division. “Neptun Deep is expected to produce approximately 8 billion cubic meters per year for almost 10 years during the plateau period. It will also lead to positive indirect effects in the economy, with an estimated additional revenue of 20 billion euros to the state budget and a 40 billion euro contribution to GDP”, says the director of OMV Petrom, in an exclusive interview offered to Energynomics.
What can you tell us about OMV Petrom’s investment plan in Neptun Deep for the coming years? What are the main steps in the project’s development? Where are we now?
Neptun Deep is OMV Petrom’s flagship project and an important project for Romania. It has the potential to substantially contribute to the country’s and the region’s energy security. The natural gas resources in the Black Sea offer Romania the opportunity to diversify its energy sources, thus reducing dependence on imports and contributing to a safer and cleaner energy mix. Natural gas is essential for Romania’s energy transition, being considered the cleanest of the fossil fuels.
In electricity production, natural gas emits less than half CO2 compared to coal.
Natural gas Gas is a resource that facilitates the transition, considering that migrating to renewable sources is a lengthy process.
Moreover, during periods when the wind is not blowing or the sun is hidden by the clouds, natural gas plays a crucial role in balancing the consumption in the grid, so that there are no interruptions in the supply of energy that the economy and the population need so much.
The development of the Neptun Deep project requires investments of up to 4 billion euros, costs that will be equally shared between the two partners, OMV Petrom and Romgaz.
The project is estimated to produce about 100 billion cubic meters of natural gas, equivalent to Romania’s consumption for 10 years.
The first explorations in the deepwater area of the Black Sea began in 2008. In June 2023, together with our partner Romgaz, we announced the final investment decision. Since then, the project has advanced, according to plan and within budget. Major execution contracts were awarded last year.
Execution agreements have been signed for the subsea production system, offshore platform, umbilical subsea cables, production pipelines, drilling rig, and ancillary equipment for the subsea wells.
Who are the main contractors so far?
We are proud to have partnered with internationally renowned companies such as Saipem, Transocean, and Halliburton, who have extensive experience in deepwater offshore projects. Additionally, the team managing the project consists of highly experienced specialists who have delivered mega projects worldwide. They have a cumulated management experience of over 100 years in mega projects and over 350 years in large scale projects.
The project is being carried out on multiple fronts, from obtaining the necessary permits and contracting to manufacturing, installation, and drilling. Various components of the project are being worked on across three continents: Europe, Asia and North America.
For example, in Indonesia, at the Saipem yard, the construction of the topside of the offshore platform Neptun Alpha is underway. In Sardinia, at another Saipem yard, work is being done on the platform’s support structure. The offshore rig that will carry out the drilling operations is expected to arrive in Romania by the end of the year.
As you can see, the activity has been intense since we made the investment decision.
The infrastructure required for the development of the Domino and Pelican South commercial fields includes 10 wells, 3 subsea production systems and associated flow lines, an offshore platform, the main gas pipeline to Tuzla, and a gas metering station. These production facilities will be located approximately 160 km from the shore, in waters with depths ranging from 100 to 1,000 meters.
When will we see the first molecule of gas on the market, and what percentage of gas will Romania need from Neptun Deep at that time?
The first production of natural gas from Neptun Deep is expected in 2027. By that time, given the transition to green energy, we will likely see an increasing share of natural gas in the energy mix, while coal usage will decrease, and capacities for wind, solar, and biomass energy will grow, with gas playing a consumption balancing role.
How fast this transition will be is difficult to predict. It also depends on several external factors: rom how harsh the winters will be to how certain sectors of the economy will evolve. For example, the development of data centers and AI leads to increased power demand. Other factors include the speed at which new renewable projects are completed and how smoothly support schemes and incentives are working.
What is certain is that without Neptun Deep, Romania would face a decline in its domestic natural gas production and greater dependence on imports. The decline in production after bringing a field into production is a natural phenomenon in the industry.
The project has recently been targeted by Greenpeace, citing negative environmental impacts. How do you respond?
Neptun Deep has been designed to minimize environmental impact. During the environmental impact assessment procedure for the project, evaluations were conducted on health, climate change, and biodiversity impact.
Throughout the project, a dedicated team of specialists and marine biologists will continuously monitor the impact on the marine environment.
The project’s direct carbon emission intensity is significantly below the industry average: approximately 2.2 kg 2 kg CO2/boe compared to an average of 16.6 kg CO2/boe for offshore gas projects.
It is very important to understand that this project does not increase the existing demand in the market, which will continue to exist in the coming years, both in Romania and at the European Union level. We need gas for heating homes (centralized or individual), for the food industry, and for agriculture. Although less visible, in the cars on the streets, in the phones we use, and even in photovoltaic panels, there are components that could not be produced without energy and gas consumption. We all want to live in a cleaner environment and we are making every effort to produce in the most sustainable and responsible way possible. At the same time, I wish for us to advance as a society and civilization, and gas is crucial for ensuring the energy supply we all need.
In the recent geopolitical context, do you see any risks for the project’s progress given its proximity to the Black Sea?
We have a prudent and responsible approach. We will take all necessary measures to ensure that the project is carried out safely and securely. Neptun Deep is not our only project in the Black Sea. We have been operating in the shallow waters of the Black Sea for over 40 years. These operations have not been interrupted due to the conflict between Russia and Ukraine. Additionally, Romania is a NATO member.
You have stated that 2028 will be the first peak production year. What will the production curve of the field look like?
The maximum plateau production will be reached after the completion of the entire infrastructure and the commissioning of the wells. It is anticipated that Neptun Deep will produce approximately 8 billion cubic meters per year for nearly 10 years during the plateau period. The project will also generate positive indirect effects on the economy, with estimated additional revenues of 20 billion euros to the state budget and a 40 billion euro contribution to GDP.
Besides Neptun Deep, what other projects are currently a priority for OMV Petrom?
We have entered the most intense investment period in the company’s history. We have planned investments of approximately 8 billion lei per year for the period 2024-2026 as we deliver our growth projects. This amount is more than double the annual average of 3.5 billion lei for the period 2017-2021.
These investments are necessary for our transition towards a low and zero-carbon future. It is an ambitious and motivating plan, and besides the Neptun Deep project, our investment projects focus on developing our solar and wind energy portfolio in Romania, creating the largest network of charging stations for electric vehicles, and producing sustainable fuels. We have made rapid progress, and in the first year since updating our strategy, we have managed to reach a portfolio of green energy projects of 2.3 GW together with partners and a network of 800 charging stations through the acquisition of Renovatio. Additionally, we will invest in new production units at the Petrobrazi refinery in the area of sustainable fuels: SAF (Sustainable Aviation Fuel) and HVO (Hydrotreated Vegetable Oil). Essentially, all these initiatives support the energy transition and the provision of clean energy that Romania needs.
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The interview first appeared in the printed edition of Energynomics Magazine in early December 2024.
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