BUCHAREST, Oct 16 (Reuters) - Romanian offshore gas producer Black Sea Oil & Gas (BSOG), controlled by private equity firm Carlyle Group LP (CG.O) , opens new tab, and leading livestock farm DN Agrar (RODN.BX) , opens new tab, said on Wednesday they will develop a 15 MW biomethane production plant, the first in the EU state.

Romania uses a mix of gas, coal, hydro, nuclear and renewables for electricity generation and has committed to phasing out lignite, or brown coal.

Biomethane is chemically identical to natural gas and can be injected into existing pipeline grids, but is produced by bacteria feeding on crops and manure in a process called anaerobic digestion.

EU rules label biomethane "renewable", meaning countries and companies can count it as green energy alongside wind and solar.

The site BSOG and DN Agrar plan to build will cost an estimated 30 million euros ($32.68 million), with construction taking two years from when a final agreement is signed.

"While commercial scale production of biomethane is well established in Western Europe, this project represents the first of its kind in Romania, and we anticipate that we will soon be able to expand it from 15 MW to over 20 MW," BSOG Chief Executive Mark Beacom said in a statement.

"With a supportive regulatory framework in place, we believe this project can pave the way for further large-scale biomethane developments in Romania."

DN Agrar, the country's largest producer of cow milk, said it estimated the project could lead to a 90% reduction in its carbon emissions.

BSOG launched Romania's first offshore Black Sea development in three decades two years ago, extracting roughly 10% of Romania's consumption.

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https://www.reuters.com/business/energy/romanian-bsog-dn-agrar-plan-15-mw-biomethane-production-site-2024-10-16/