The deal that Duro Felguera could not achieve in Algeria is happening in Romania. If Sonelgaz filed a 413 million lira compensation lawsuit against the authorities due to irregularities in the construction of the Djelfa thermal power plant, Romgaz chose the agreement A new delay at the Iernut factory. The gas producer, the country’s largest, is giving the already operating Spanish company another six months to finish the job. Second renegotiation of the original contract.
As the Romanian company’s CEO Razvan Popescu explained in the last conference with analysts, Romgaz assumes that Duro Felguera will not deliver the job before the end of the year as planned. “Due to lower than expected mobilization, the new deadline for completing all remaining work will be June 2025,” he explains.
Specifically, the deadline is May 31. According to the gas company’s calculations, 95 percent of the work has been completed. According to the results of previous presentations, Duro Felguera had only 70% of projected resources initially with the signing of the contract.
But the company headed by Eduardo Espinosa faces an additional problem when it comes to finishing work: A significant part of the machinery was left at the facility four years ago and has not been touched since then. “Considering that most of the equipment was installed during the first contract four years ago and has not been operational since then, it is important to note that complex tests had to be carried out to ensure the operation of the equipment. Popescu added that the installation was carried out in optimal conditions and without posing any risks to people working on the site.
Therefore, if a part of the machine becomes unusable due to not being used in the last four years, additional costs may be incurred for Duro Felguera.
This was the second renegotiation of the contract signed by the listed Spanish company in Romania. In his statement to the National Securities Market Commission (CNMV) in the summer of 2023, Duro Felguera said that he signed a new contract worth 70 million euros together with Romgaz to complete the work for the Iernut plant. The original agreement in question was worth 250 million and was signed by both parties.
In the second agreement, the company controlled by Prodi Group gave itself 16 months to complete the work, which will end in December. Of course, it also included the possibility of extension in case it could not be completed on time. The power plant, which will have an installed capacity of 430 MW, will include four gas turbines, as well as four recovery boilers and two steam turbines for steam production with three pressure levels.
Duro Felguera’s Algerian side
With this postponement, Duro Felguera can focus on the Algerian front. The listed company failed to reach an agreement with Sonelgaz on renegotiating the construction contract of the Djelfa thermal power plant. Therefore, the gas company filed a request for arbitration with the Algerian Chamber of Commerce and Industry, where it demanded 413 million euros for the suspension of the contract.
The complaint led the CNMV to decide to suspend the company’s listing. The regulator forced him to make a provision of 100 million euros to return to the markets (Duro had not considered any amount). Therefore, the organization’s board of directors met last week to reorganize the accounts for 2022 and include this figure in its financial statements.
In parallel, he will submit his written objection to the arbitration request before December 10 and “will reject the claim as he understands that the suspension of the contract due to Sonelgaz’s violations is lawful.”
Additionally, the listed company plans to seek compensation of around 200 million from the African energy company.
