Petrom Power Plant

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The EBRD is considering providing EUR 200 million corporate senior unsecured loan to the Romanian oil & gas company, Petrom S.A., the largest company in Romania, to fund the construction of a new 860 MW CCGT power plant, which will generate electricity with high availability (91% load factor) and high level of performance (the “Project”). The unit will be built in Brazi, next to an existing refinery of Petrom. The plant is designed according to the highest technical standards and will meet the latest European environmental requirements. This is the first Combined Cycle Gas Turbine of this kind to be installed in Romania and as such will be the most efficient thermal power plant of this size when commissioned. The transition impact of the Project is derived from: Petrom is the largest company in Romania and has proved oil and gas reserves of 872 mn boe, a maximum refining capacity of 8 million tons per year, approximately 550 petrol stations in Romania and 269 petrol stations in the Republic of Moldova, Bulgaria and Serbia (as of end 2008). It is 51% owned by OMV A.G., an Austria-based integrated oil company with interests throughout central and eastern Europe. Petrom is also traded on the Bucharest Stock Exchange. EBRD is considering providing up to EUR 200 million. Approximately EUR 500 million. CCGT The Combined Cycle Gas Turbine Plant (CCGT) will be constructed on a brown field site at the refinery and will consist of two 291 MWe co-generation units (gas turbines and recovery boilers) and one steam 313 MWe turbine. A dedicated 30 km gas pipeline will be constructed to deliver gas to the Power Plant and a dedicated high voltage power line will be constructed to deliver power to the grid. Up to twenty percent of the power produced and up to 96 tons/hour steam will go to Petrom for internal use, with the remainder of the power going to the grid. The Project was screened as Category A under the 2008 Environmental and Social Policy, requiring an Environmental and Social Assessment of the proposed power plant, and studies on the gas pipeline, overhead power lines, and on the services to be provided from the neighbouring Petrom refinery, public consultation, and action plans for each asset. These studies were carried out by independent consultants. Environmental studies were done on soil, hydro-geology and underground water, water usage, air quality, biodiversity, landscape impacts, noise. Social issues reviewed included socio-economic impacts, cultural heritage, labour, occupational and public health and safety. The most significant atmospheric emissions from the CCGT will be from the operational phase when natural gas will be combusted to drive the gas turbines and also generate heat/steam for the steam turbine, resulting in nitrous oxide (NOx) and sulphur oxide (SOx) emissions. The CCGT is located in close proximity to other significant NOx and SOx emitters in the form of the Refinery itself and neighbouring Dalkia CHP plant, and a cumulative assessment of air emissions will be undertaken following a decommissioning programme at the Refinery, which will remove some emissions sources. The CCGT will be highly efficient, with total natural gas consumption of 1.2bcm/year. It will have state-of-the-art emissions reduction equipment, such as low NOx burners, and will fulfil the latest European environmental emissions requirements outlined in the Large Combustion Plant Directive. The sulphur content in the natural gas feedstock to be used by the CCGT is low and hence will not result in significant SOx emissions from the auxiliary steam boiler. In order to monitor NOx concentrations in CCGT flue gas, real-time air emissions monitoring equipment will be installed on the CCGT flue stacks. The CCGT will be designed and implemented in conformity with Best Available Techniques (BAT) applicable to the CCGT for ensuring environmental protection. Limited contamination of soil was found on the site from the refinery operations, however within the permissible limits for industrial sites. Upgrades of the refinery’s wastewater treatment plant are necessary and included in action plans. Natural gas pipeline The national gas company Transgaz will construct, own and operate an 800mm diameter / 30 km gas pipeline dedicated to the CCPP, from an underground storage facility at Butimanu, Dambovita County. The route will traverse agricultural land and has been designed to avoid local settlements and minimise river crossings. Under the EU EIA Directive and Romanian law, an EIA for this length of gas pipeline is not mandatory, and the Romanian environmental authorities will screen the project to determine what kindof studies are needed. See Public Consultation section below. Overhead Line (OHL) connection The OHL Connection between the CCGT and National Grid will involve installation of new pylons, overhead cables, and High Voltage (HV) switchgear and 220/400kV transformers (both state-of-the-art by Siemens). A short (3km) high voltage power line will be constructed from the CCGT to the Brazi Vest switching station. Construction, operation and decommissioning of the OHL Connection will be carried out by the Romanian national electricity transmission network operator, Transelectrica. Electromagnetic radiation was reviewed, and the closest receptors are 750m distant. No significant environmental or social issues were identified, and an action plan has been agreed for construction impacts, such as dust control and traffic management. All of the above will be installed in accordance with Romanian norms which are comparable with EU standards. Public consultation and information disclosure Petrom has developed a Stakeholder Engagement Plan (SEP) which identifies workers, the PetroBrazi refinery, the villages near the refinery, and the villages near the route of the gas pipeline as stakeholders. Environmental and social assessments and action plans have been put in the public domain in locations near the project, in the EBRD offices in London and Bucharest, and posted on the client’s website (http://www.petrom.com/portal/01/petromcom/berd_documents) in Romanian and English languages. The Power Plant went through a Romanian EIA process in 2007, including public hearings at different stages. The Overhead Electrical Lines are not subject to EIA, but went through a public notification process. The Gas Pipeline designs are not yet ready for screening by the environmental authorities, who will determine if an EIA is needed. At a minimum (if no EIA is needed), the environmental and social report and action plan prepared for EBRD on the pipeline will be in the public domain. If an EIA is required, it will go through the full process including notification and public hearings. All action plans for the CCPP, OHL, and Refinery have been disclosed. Action Plans and Reporting Environmental and Social Action Plans (ESAPs) have been developed for each component of the Project – CCGT, gas pipeline, OHL Connection and linkages with the Refinery. These action plans include management of the mitigation measures agreed, as well as monitoring requirements. Petrom will report both to the EBRD and to the public on an annual basis on the implementation of the plans. Site visits will be undertaken during construction and periodically thereafter. An independent environmental and social audit will be required after commissioning. There is an Environmental and Social Impact Assessment available for this project. None. Petrom SA 239 Calea Dorobantilor 010567 Bucharest tel/Fax : +40 21 4060 000 Lacramioara Diaconu, Cristina Enoiu, Florin Frunza at : lacramioara.diaconu@petrom.com cristina.enoiu@petrom.com florin.frunza@petrom.com