Black Sea Oil & Gas and Transgaz sign 15 year contract for the MGD Project gas production transmission into the NTS

Bucharest Romania, 9 November 2018

Transgaz S.A. (“Transgaz”) CEO, Mr. Ion Sterian, and Black Sea Oil & Gas SRL (“BSOG”) CEO, Mr. Mark Beacom, today signed the gas transmission contract for the transport of the Midia Gas Development Project (“MGD Project”) production into the National Transmission System (“NTS”).

The contract, which is subject to FID, is the outcome of the successful efforts undertaken under a Cooperation Agreement signed in 2016 and an open season capacity booking process which first commenced in July 2017. The contractual period covers 15 years with a first gas delivery date on 1 February 2021 at a transmission capacity of 1 Bcm/year.

The MGD Project consists of 5 production wells (1 subsea well at Doina field and 4 platform wells at Ana field) a subsea gas production system over the Doina well which will be connected through an 18 km pipeline with a new unmanned production platform located over Ana field. A 126 km gas pipeline will link the Ana platform to the shore and to a new GTP. The processed gas will be delivered into the NTS at the gas metering station to be found within the GTP.

Commenting on the contract, Mark Beacom said: “We are very pleased to have reached this important milestone in this pioneering offshore project that we have been working on alongside our partner Transgaz over the past three years. We thank Mr. Sterian and his team for their proactive and professional approach to overcome a number of regulatory and technical challenges and reaching this stage.”

With respect to the MGD Project, Mark Beacom stressed that: “While the assessment of the impact of the offshore law on our business is still underway, we continue to move ahead to close out all the remaining milestones, necessary for our Shareholder and Partners to reach a decision. These milestones include completing all the regulatory requirements, the signing of a gas sales agreement with a gas buyer, having in place all the long lead and major equipment purchase orders, EPCIC and Drilling Contracts. The assessment of this Offshore Law on the project’s economic viability will be a key part in determining whether a favorable decision to FID will be taken.”

“Given the natural gas deposits discovered in the Black Sea in the last period, Transgaz intends to expand the National Transmission System in order to set up an additional entry point for the natural gas coming from the Black Sea offshore blocks. The project consists of building a new 20″ (Dn 500) gas pipeline designed to carry natural gas at a pressure of 55 bar, with a total length of approximately 24.37 km that will connect the Black Sea coast with Transit 1 transport pipeline on the route Black Sea coast – Corbu – Sacele – Cogealac – Gradina. The project will contribute to the sustainable development of the area, and all natural gas coming from this block will enter the National Transmission System,” said Ion Sterian, Transgaz’s General Director.