Romania relies on gas in the Black Sea

On the wild beach of Vadu, tourists come to enjoy the freshness of the Romanian coast, far from the seaside resort of Constanta, the big city further south. In the midst of this sandy landscape, a new construction made of pipes and a thread-like chimney has grown out of the ground in recent months. This gas treatment station will be connected by a 120-kilometer gas pipeline to the Ana sea platform, from which gas will be pumped from this summer.

Important deposits

This project is managed by Black Sea Oil and Gas (BSOG), a Romanian company whose main shareholders are the American group Carlyle and the European Bank for Reconstruction and Development. In ten years, more than 370 million euros have been invested in natural gas production. BSOG hopes to receive 1 billion cubic meters of gas per year, or 10% of Romania’s annual consumption.

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In 2021, Turkey discovered 540 billion cubic meters of gas in its Black Sea waters, an amount that would supply the country’s needs for thirty years. Mining would begin in early 2023, reducing the country’s dependence on Russia and Azerbaijan. Romania also has significant deposits of 60 to 80 billion cubic meters in its Neptune perimeter.

Since 2018, however, its investments have been hampered by the “Offshore” law, which notably obliges it to sell half of its production on the national market. The American Exxon, which shared 50% of the Neptune perimeter with the Romanian-Austrian company OMV Petrom, has decided to withdraw from the project in 2021. Romgaz, a Romanian subsidiary, will buy back its shares for $1 billion.

20% of imported gas

Until then, Romania could boast of being one of the most energy self-sufficient states in the EU alongside Estonia and Sweden. This is thanks to an energy mix that combines hydroelectric power, coal, wind, nuclear power and, above all, a long tradition of gas and oil production. Less than 5% of its gas consumption was imported from Russia, thanks to resources on land, in Transylvania and in the already exploited Black Sea fields.

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In just a few years, gas imports have increased, not only due to a gradual phase-out of coal, which provided 16% of energy demand in 2018, “but also with the coming into force of the ‘Offshore’ law, which prevented new investments and modernization in onshore and offshore operations, says Ana Otilia Nutu, energy specialist at the Expert Forum think tank. Today the country imports almost 20% of its gas. »

Security and environmental barriers

Black Sea gas is back in the spotlight as war rages in neighboring Ukraine. Reducing dependence on Russian gas is becoming a priority, and on April 15 an amended version of the “Offshore” law was presented to the Romanian Parliament, reducing certain restrictions. The sales obligation on the Romanian market has thus increased to 40% of production.

“Black Sea gas could also allow Romania to export to Bulgaria, Moldova and elsewhere, says Iulia-Sabina Joja, security expert in the Black Sea region for the Washington-based Middle East Institute. However, the tensions prevailing there and the risk of military accidents could delay investments. »

Another obstacle for Otilia Nutu concerns the energy transition: “The gas is a fossil fuel and extraction will only take a few years. » In her opinion, Romania should invest more in renewable energy, storage and energy efficiency in the long term, “which is far from the case today. »

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