The end of 2015 proved to be a key-point for the EU’s Energy union strategy. With 195 key energy infrastructure projects, the European Commission plans to reduce the Russian gas dependency by developing a whole new energy market through different interconnections between EU states and several gas suppliers outside the European Union. This is a major step, made by the European Commission after adopting the “European Energy Security Strategy” on May, 26. In less than 7 months the Union list of projects of common interest was ready. Romania is one of the EU states that applied and will receive the necessary funding for 16 projects. In the energy developing plan, Romania appears as an important gas supplier and interconnector for the South-Eastern Europe if we take into consideration the big number of projects that will be implemented on the Romanian territory. In 2015, Romania succeeded to cover 98% of its energy market with domestic production. Although the Romanian gas production is in continue decrease, arriving at 11 billion cubic metres this year, according to the Romanian Regulatory Authority for Energy, the gas dependency is lower than a year before. Reports show that in 2015 only 3% of the natural gas consumption comes from outside the Romanian borders, meaning that Romania has the ability to downscale the gas import. Even though Romania it’s prepared in theory to become an important gas exporter for the neighbouring countries, in practice the situation it’s not working at full capacity. At the Expert Forum conference organized on November, 25 the Romanian authorities and experts in the energy market and the big Romanian gas companies Petrom, Transgaz, and also Exxon, discussed about the need of creating interconnectors between the EU states in order to facilitate the import-export natural gas at the European Union level. Romania’s contribution is significant to the process. In present, Romania has only one-way interconnectors for assuring the import of natural gas which is not convenient for its energy market or for the neighbouring countries such as the Republic of Moldova or Bulgaria who don’t have alternatives of gas supplies. One inconvenient was already solved along with the inauguration of the Iaşi-Ungheni pipeline which connects the Republic of Moldova with the EU energy market, providing alternative to Russian gas. Moreover, the National Gas Transmission Company “TRANSGAZ” SA plans to build a pipeline between Oneşti-Gherăeşti-Leţcani in order to ensure a transmission capacity of 1.5 bcm/year at the interconnection point between the gas transmission systems of România and the Republic of Moldova.
The situation is improving after the discovery of natural gas resources in the Black Sea’s Deep Waters by OMV Petrom and ExxonMobil in 2012 with an estimate of 42-84 bcm of natural gas. Other companies such as Lukoil also announced a new discovery in the Black Sea Deep Waters. So, the Black Sea’s resources can make Romania a desirable natural gas exporter in the European Union. To achieve that, Romania has to develop its natural gas transmission system (NTS) and to modernise the NTS installations and equipment. In fact, those measures were included in the Development Plan for the National Gas Transmission System for the 2014 - 2023 period. A main project that includes Romania’s participation is the Bulgaria-Romania-Hungary-Austria Corridor which will assure the connection between the Black Sea’s natural gas resources and Central Europe. The project is in the Union list of projects of common interest adopted on November 18 by the European Commission and will ensure the possibility for permanent bidirectional flows between the interconnections with Bulgaria and Hungary. Also, the National Gas Transmission Company “TRANSGAZ” SA plans to build a new transmission pipeline that would connect the Podişor Technological Node to the Horia GMS and to develop three new compressor stations: Jupa, Bibeşti and Podisor by 2019. The total investment value resulted from the TransGaz studies is estimated at EUR 560 million, half of the value being covered by the EU grant under the Connecting Europe Mechanism. Part of the costs, such as the project’s feasibility studies were covered by the U.S. Trade and Development Agency who offered a $956,000 grant to Transgaz in 2015, fact that proves the interest shown by the other countries outside the European Union in the European Energy Security Strategy.
Interconnector in the SE Europe
The Black Sea’s natural gas resources are not the only sources of gas that the SE Europe states could rely on. An efficient but not the cheapest solution could be the Caspian gas. The European Union has taken into consideration a big project named the Southern Gas Corridor that will bring Azeri gas to Europe through Azerbaijan, Georgia, Turkey, Greece and Italy. This is another project of common interest included by the European Commission on the Union list. The Southern Corridor is formed of three pipelines: the Trans Adriatic Pipeline TAP which will initially have a capacity of 10 billion cubic metres (bcm)/year, the Trans Anatolian Pipeline and the South Caucasus Pipeline. Estimated at US $45 billion the Southern Gas Corridor could be an alternative also for the Romanian energy market. Romania may have access to the Caspian gas through Bulgaria and Greece, project known as the Vertical Gas Corridor. The interconnector Bulgaria - Greece will be able to bring Caspian Gas from the Trans-Adriatic Pipeline and could ensure 1/3 of the Bulgarian gas consumption. The European Union plans to contribute with 45 million euros for the project’s development. Romania can receive Caspian gas through the interconnectors at Giurgiu and Ruse if the interconnector between Greece and Bulgaria will be ready. Good news is that the two mentioned have signed on December 10 the agreement for the construction of the Interconnector Bulgaria-Greece, agreement which includes the expansion of the transmission pipeline capacity from 3-5 bcm per year to 10 bcm per year or more. The completion deadline of the interconnector is predicted to the end of 2018. Also, Transgaz has asked for European financing for the interconnector Giurgiu-Ruse and the answer is pending. In these conditions, Romania’s capacity to become an important interconnector in the SE Europe can become reality.
Another project that can deliver Caspian gas to Romania is the AGRI project between Azerbaijan, Georgia and Romania via the Black Sea. AGRI is expected to transport liquefied Azeri gas from Georgia, across the Black Sea, to a LNG terminal to be built on the Romanian Black Sea Coast. From that point, the gas will be pumped through the Romanian natural gas transmission system to Hungary, through the Interconnector between Romania and Hungary (Arad – Szeghed) to be transported further to the European market. According to the feasibility study made in 2015 the AGRI project has the capacity to transmit 5 and 8 billion cubic meters per year. Although the AGRI project is a very ambitious project, the European Commission didn’t include it on the updated list of projects of common interest. This is not good news for Romania’s energy infrastructure which will have to find other sources for the project financing.
Different from the AGRI project, Eastring is one of the projects of common interest included on the Union list by the European Commission on 18 November and will connect the existing gas infrastructure between Slovakia, Romania and Bulgaria. The Eastring initial capacity is of 20 billion cubic meters of natural gas per year with one-directional flow. According to the projects initiators, this amount covers the whole Balkan’s natural gas annual import. The Eastring pipeline will provide the Balkans with gas from the European gas market offering diversification of natural gas sources. Romania, as far as we can see, will play a defining role on this project, assuming to modernise its internal gas transmission system. Also, Romania will ensure the gas transit between the SE Europe and the Western Europe and will have the opportunity to export its natural gas resources from the Black Sea. Therefore, the SE European countries will have alternatives for the Russian gas by having the possibility to choose another gas supplier such as Algeria, Qatar or Romania.
So far, the policy aims to offer EU states diverse sources of natural gas supply. Being included in the process, Romania has to adopt energy measures in order to implement the European energy projects mentioned below. One step was already made in January 2015 when the Energy Department of the Ministry of Economic Affaires published a new public debate regarding the Romanian energy strategy for the 2015-2035 period. According to the document, the necessary investments in the Romanian energy sector for the 2015-2035 period, are estimated at about 100 billion euros. The main projects included in the document are: the finalization of the Romania - Bulgaria interconnecting project and the implementation of a bi-directional natural gas flow at the interconnection point Giurgiu-Ruse, in order to ensure the construction of the BRUA corridor. Also, Romania plans to attach the natural gas transit system to the national gas transmission system and to implement a bidirectional flow (reverse flow) in Isaccea I (I Transit). The interconnection with the TAP project in order to receive natural gas from Azerbaijan is also included in the Romanian energy strategy.
Therefore, Romania enjoys the economic premises and the geopolitical environment to become a key player in the wider Southeast Europe and the Caspian region, in a period of major reshaping for the energy markets, and especially in the natural gas market.