BUCHAREST, Oct 16 (Reuters) - Romanian offshore gas

producer Black Sea Oil & Gas (BSOG), controlled by private

equity firm Carlyle Group LP, and leading livestock farm

DN Agrar, 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.

($1 = 0.9179 euros)