Romgaz and Liberty have concluded a Memorandum of Understanding (MoU) aimed at setting up a joint venture, in view of developing Greenfield investment projects, respectively the development of a gas-fired power plant (CCGT) and power plants based on renewable sources, using both wind and photovoltaic technologies.
Through this Memorandum of Understanding between Romgaz and Liberty, the two companies agree to work together in the true spirit of the partnership to make sure there is a single and receptive approach on the implementation of investment projects, which can be financed both from equity and from external sources through the joint venture that will seek to attract European funds through the ‘Green Deal’ financing mechanism and/or through the financing schemes available in Romania.
The period of implementation of these investment projects will range between 3.5 and 4 years, during which both companies will cooperate and make joint efforts for the investment projects to become a reality and a model of best practice in the Romanian economy.
“This partnership is an example for Romania. We thus continue Romgaz’s priorities in the long-term development strategy through which we want to diversify the natural gas capitalization chains at a higher level. The investment is an important one at national level and represents a first step of positioning Romania on the map of Europe in the production of green steel. Such investments lead to horizontal developments of many economic sectors and implicitly a motivation for Romgaz to amplify exploration-production programs,” said Romgaz CEO Adrian Volintiru.
“Based on the agreement Liberty signed with Romgaz, we will be able to deliver the long-term competitive energy needed to support this fascinating project to produce steel with a reduced carbon footprint in Galati. I have no doubt that this project will be a great success and will put Galati on the map, not only in Europe, but globally, as a low-carbon, sustainable steel manufacturing unit for a new era, built for future generations,” said Sanjeev Gupta, Executive Chairman of the GFG Alliance.
Creating a European GREENSTEEL flagship at Liberty Galati
Liberty Galati, located in South-East Romania, is the largest integrated steel plant in the country and leader in manufacturing metallurgical products, with a current production capacity of 2 million tons of steel as well as the ability to increase that output in the future.
The Galati Steel Plant produces a wide range of quality flat products (plates, coils, galvanized sheets & coils and organic coated products) as well as welded tubular products and supplies, for customers across Romania, the Balkans and elsewhere in Europe. The products produced are used in shipbuilding, construction, pressure vessels, automotive and other industries. Its welded tubular products are used for transporting oil, gases and other fluids.
Liberty Galati has around 5,600 employees and 2,000 contractors, making it the biggest employer in Eastern Romania. The topmost priority for the Galati Steel Plant is to ensure a safe work environment for those employees and contractors.
The unit focuses on continuously improving the quality of products and services offered to its customers, protecting the environment and encouraging young people to join the local team.
Liberty Galati is actively involved in community development activities through the long-term sponsorship of local medical and educational projects.
The Executive Chairman of GFG Alliance, which includes Liberty Steel Group, on June 10 welcomed Ludovic Orban, the Prime Minister of Romania, to Liberty Galati as he signed a series of agreements with Government, the national gas company Romgaz, EximBank Romania and also local educational institutions to help deliver his GREENSTEEL vision.
During the visit, Sanjeev Gupta and Virgil-Daniel Popescu, the Minister of Economy, Energy and Business Environment, signed a Memorandum of Understanding (MoU) supported by Prime Minister Orban, which incorporates GFG’s plan to install modern steel-making technologies, significantly reducing direct CO2 emissions, increasing the use of lower carbon energy sources and creating a more flexible, competitive operation.
Alongside the investment MoU, GFG Alliance signed agreements with key national suppliers and respected educational institutions that will work with Liberty Galati to deliver the transformation through the provision of competitive energy, skills, research, know-how and finance.
“It is a great honour to welcome the Prime Minister and other senior members of the Romanian government here today in support of our GREENSTEEL vision for Galati. Through their backing, and the agreements we have signed today with Romgaz we will be able to deliver the competitive long-term energy needed to underpin this exciting project. Galati University will partner with us to create a GREENSTEEL Academy aimed at developing a new generation of highly skilled workers equipped to handle cutting edge technologies. The National Research Institute will help develop the know-how required to deliver complex hydrogen projects. EximBank Romania will cooperate with us to secure competitive long-term funding for the project,” the Executive Chairman of GFG Alliance mentioned.
GFG Alliance GREENSTEEL investment plans include the following.
- A Direct Reduced Iron (DRI) plant with 2.5 million tonne capacity. The DRI plant, which will initially use natural gas, will transition to using hydrogen as hydrogen production technology becomes more cost effective.
- Two Electric Arc Furnaces, one of which will be dedicated to cast slabs for Galati’s world-renowned plate mill and the other for direct casting of hot rolled coil production, a state of the art and highly competitive technology. The EAFs will reduce CO2 emissions per tonne of steel produced by up to 80%, with emissions dropping to almost nothing once the DRI plant is hydrogen powered. This will make Galati the first European primary steel plant in GFG to get going on a path to become carbon neutral by 2030.
- Expand production capacity towards 4 million tonnes of liquid steel a year.
Below are the summaries of the MoU.
- The MOU with the Ministry of Economy, Energy and Business Environment outlines GFG’s investment plans for Liberty Galati and confirms the Ministry’s determination to support and encourage GFG Alliance’s investment in the sustainable development of Liberty Galati.
- The MoU signed with Adrian Constantin Volintiru, the CEO of Romgaz, provides a framework for the potential joint venture partnership between the parties to build a new natural gas power plant within the curtilage of Liberty Galati.
- The MoU signed with Professor Dr. Puiu Lucian Georgescu, Rector of ‘Dunarea de Jos’ University Galati, is to collaborate in the creation of a Liberty Galati GREENSTEEL Academy. The Academy will encourage more young people, from top-quality engineers to technical and operational specialists, to come into the steel industry to help develop more sustainable production methods.
- The MoU signed with Mihai Varlam, Executive Director at The Romanian Institute for Research and Development for Cryogenic and Isotopic Technologies, is to collaborate in the development of technical studies and business applications of green hydrogen technology in steel production.
- The MoU signed with Traian Halalai, Executive Chairman, EximBank Romania, agrees to collaborate to support GFG’s investment in LIBERTY Galati.