The state company Romgaz, the largest gas producer in Romania, signed a Memorandum of Understanding with SOCAR, the national oil company of the Republic of Azerbaijan. The two companies propose to build a natural gas liquefaction terminal and a regasification terminal, as well as other installations and facilities necessary for the purpose of transporting gas from the Caspian area to Romania.
“Romgaz and SOCAR, the national oil company of the Republic of Azerbaijan, signed today, October 19, 2022, in Bucharest, a Memorandum of Understanding that lays the foundations for a new collaboration between the two companies. Through this Memorandum of Understanding, the two companies formalize their intention to explore opportunities for the joint development of a liquefied natural gas project at the Black Sea. The project would consist of a natural gas liquefaction terminal and a regasification terminal, as well as other installations and facilities necessary for the purpose of transporting gas from the Caspian region to Romania,” Romgaz announced in an announcement at the Bucharest Stock Exchange.
The signatory companies propose to initiate the joint development of a study that will identify the technical, financial and commercial feasibility of such a project, and based on its results to start negotiations with a view to concluding an agreement on the terms and conditions for the development of the Black Sea LNG project.
“In the current energy context, the initiative of the two companies represents a new opportunity to ensure the access of the Romanian market and those of the region to natural gas resources in the Caspian Sea area with a significant positive impact on the energy security of the states of Central and Southern Europe -East”, states Romgaz.
In 2019, the two companies signed a memorandum on cooperation in the field of geological exploration, as well as upstream oil and gas projects, the Azeri press reported.
“The exchange of know-how, technology and experience between the two oil and gas companies with similar history will pave the way for successful cooperation. Little-explored basins can be extensively studied with the help of modern technologies and experiences,” wrote the Azerbaijani press, quoting the Romgaz CEO.
The purpose of the memorandum was to establish a “strategic partnership” with SOCAR, Romgaz said in a statement.
The announcement comes after the two companies first expressed plans to cooperate on offshore exploration projects in the Black and Caspian Seas.
In early 2019, SOCAR and Romgaz also explored possible cooperation on the Trans-Anatolian Pipeline (TANAP) and Trans-Adriatic Pipeline (TAP) projects, which will deliver Azeri gas to Europe via the country’s Shah Deniz 2 fields in The Caspian Sea, as part of the Southern Gas Corridor.