Seen so far as just wishful thinking, gas interconnection with other
regional countries has become a reality: last week Romania and Hungary
inaugurated the Arad-Szeged gas pipeline. And the authorities’ big plans do not
stop there. Romanian intends to connect with Bulgaria, Serbia and Moldova, and
although they are seen as competitors, it also wants to be a part of both the
Nabucco and South Stream gas pipeline projects.
The Arad-Szeged pipeline, recently inaugurated at Csanadpalota
Metering Station in Hungary, clears the way for gas supply diversification in
the region, long desired by European countries and a start for gas supply
separation from “Mother Russia”. Hungarian gas transporter FGSZ Foldgazszallito
and Romanian gas firm Transgaz jointly built the pipeline to allow natural gas
transmission between the two countries, which boosts competition within the
region.
Implementation of the 47-km long Hungarian section of the 109-km long
pipeline with a 3 billion m3 capacity required a EUR 33.3 million investment
from the Hungarian gas company. The European Union supported the implementation
of the project with EUR 17 million.
”The MOL Group believes that an integrated gas market can be
established in the CEE region through regional co-operation. The standard
infrastructure-based platform can facilitate the purchase of gas from new
sources within the region. The Arad-Szeged interconnection gas pipeline boosts
market competition that will present several advantages to both traders and
consumers. Relying on future transmission projects, like the Nabucco pipeline,
such cross-border solutions interconnecting regions will substantially increase
the security of supply,” said Zsolt Hernadi, MOL’s chairman and
CEO.
The pipeline that currently sends gas from Hungary to Romania can be
made bi-directional with additional investments on the Romanian side that would
further increase the significance of this interconnection
pipeline.
Romania also plays an important role in the transit of gas from
Russia to Bulgaria and Turkey, and can play an enhanced role after the Nabucco
pipeline is finished and the import of LNG is done through Constanta. In
addition, the country has recently signed a memorandum with Azerbaijan and
Georgia concerning the construction of the AGRI gas
pipeline.
In order to enhance gas transit to neighboring countries, Romania
plans to interconnect with nearby states Serbia and Moldova, according to the
Romanian Competition Council.
Meanwhile, further gas interconnector projects encouraged by the EU
in the region include the Romania-Bulgaria pipeline project, planned to run
under the Danube River from Giurgiu (the Romanian bank) to Ruse (Bulgarian bank.
The interconnector will be built by Transgaz and Bulgargaz under an existing
agreement, with completion intended by the end of 2011.
In light of the geopolitical gas projects, including those for
storage in depleted reservoirs or LNG tanks, the importance of the regional
strategic position of Romania and its massive gas storage capacity are key
factors. Moreover, the national gas grid infrastructure is well
developed.
Romania imports gas from only one source, the Russian Federation.
Policy in connection with gas exports across the EU is based on a large system
of pipelines, of which only one passes through Romania, with a connection
station in Isaccea.
The Russian gas giant Gazprom has a major gas transport project in
southern Europe: South Stream. Just last week, Gazprom officials and the
Romanian authorities signed a memorandum of intent over the possibility that the
South Stream pipeline may transit Romania.
“Following today’s discussions (with Romanian officials), we’ve
signed a memorandum of intent for a technical and economic analysis of a South
Stream pipeline going through Romanian territory,” said Alexei Miller, Gazprom’s
chief. The firm has already completed feasibility studies for all the countries
included in the project and is now drawing up the technical-economic study for
the entire South Stream project, Miller added.
The pipeline will be 900 km long and is estimated to transport 63
billion cubic meters of natural gas annually. The project is seen as a rival to
the planned Nabucco pipeline, in which Romania has already committed to
participate. Both projects are due for completion sometime in
2015.
Nabucco is aimed at diversifying the sources of imports. It is
scheduled to deliver approximately 31 billion cubic meters of gas annually from
the Caspian Sea to Central Europe via Turkey and Romania, bypassing Russia.
Romania’s participation in these projects will modify the present situation,
with ramifications on the internal gas market too.
Romania’s natural gas reserves and
consumption
Romania’s natural gas reserves are estimated by Cedigaz 17 at about
630 billion cubic meters (Bcm). The country’s production used to cover more than
70 percent of total gas consumption. Due to the internal reserves, the gas
provided nearly 35 percent of total energy consumption. As the local deposits
continued to be exploited, local production has dropped from 35 Bcm in 1988 to
only 11 Bcm billion in 2009. The decrease has led Romania to lean more heavily
on imports from Russia.
On average, from 2003-2008 Romania imported 30 percent of its gas
needs from Russia. This is in contrast to the early 1990s when the country was
importing only 18 percent of its consumption needs.
Since the late 1980s, consumption has dropped from values of around
40 Bcm to about 13 Bcm in the recession year 2009. The explanation lies in the
structural changes that have occurred in the economy over the past 20 years as
the share of heavy industry has reduced in favor of the services sector. In
order to cope with such variations, Romania has developed gas storage capacities
in depleted reservoirs. Today, the country can rely increasingly on deposits
designed to cope with winter consumption, which registers a maximum deposit
extraction of 26 Mcm/day.