Romania aims to cut Russia gas reliance

By Al Mayadeen English
Source: Agencies
3 Jul 2022 07:36

Gas is now flowing to Romania from a new Black Sea platform operating in waters where mines can be found.

Romania aims to cut Russia's gas reliance.

Gas is now flowing to Romania from a new Black Sea station working in waters rife with mines.

Following the packages of draconian sanctions imposed on Russia and the latter's promise to retaliate against these measures, Romania now aims to reduce its reliance on Russian natural gas imports.

Countries are trying to find alternative supplies as fears mount across the European Union that Moscow may halt gas imports in retaliation to the Western sanctions campaign against it.

"Romania is taking a decisive step to ensure its energy security... at a time when international gas supplies are threatened by the war in Ukraine," Prime Minister Nicolae Ciuca said on Tuesday as he inaugurated a processing plant belonging to Black Sea Oil & Gas (BSOG) in the southeastern village of Vadu.

Despite having huge reserves on land and at sea, Romania must rely on Russia in the winter to cover approximately 20% of its demand.

BSOG, backed by American private equity company Carlyle Group LP and the European Bank for Reconstruction and Development, began tapping into underwater reserves two weeks ago, becoming the first new offshore Black Sea development in 30 years.

Three million cubic meters of gas are extracted every day by the $400 million platforms. It is expected to recover one billion cubic meters per year for ten years or around 10% of Romania's demands.

"Today we are facing an emergency in terms of energy supply. We must put our old devils in the closet... and start producing locally," said Thierry Bros, an expert on energy and the climate at Sciences Po university.

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"We must relaunch the projects in the Black Sea, relaunch the growth of production in Norway, in the United Kingdom we must think of launching the production of shale gas and in France the production of mine gas," he told AFP.

Mines and warships

In Vadu, BSOG CEO Mark Beacom stated that his company's "state-of-the-art" infrastructure will be used for future gas or renewable energy projects in the Black Sea. But the war in Ukraine has complicated the situation.

"We are not in a war zone, but we are close enough and it clearly has an impact," he said. "We've had mines detected close to the platform, we've had warships that go close to our platform and we've had airplanes circling our platform," he added.

BSOG controls two concessions about 120 kilometers (65 nautical miles) from the Romanian shore, part of which was recovered from Ukraine in 2009 by Bucharest following a ruling by the International Court of Justice in The Hague.

Despite Romania's reliance on offshore gas reserves estimated at 200 billion cubic meters of gas, investors remain cautious.

The Austrian company OMV and its Romanian partner Romgaz have yet to decide whether to proceed with the Neptun Deep project, which aims to extract between 42 and 84 billion cubic meters of gas.

Race for gas

European governments are scrambling to store supplies as the war in Ukraine goes on.

Sebastian Herold, a professor of energy economics at the Darmstadt University of Applied Sciences, stated that the security of supply in the winter depends on two factors, "how full the storage facilities are and how much new gas keeps arriving from abroad." He added that Russian deliveries are crucial.

Fears that a sudden shortfall of Russian gas may bring Europe's largest economy to its knees drove the German government to pass laws mandating that all of the country's gas reservoirs be 90% full by November.

Germany has already decided to phase out Russian oil and coal as part of Western sanctions against Moscow. However, getting independent of Russian gas will take longer – and will not be cheap, as the Ukraine conflict and following sanctions drive up energy prices.

It is worth noting that on March 19, Russia warned that Ukraine had planted mines in the Black Sea to use against Russia, which could drift as far as the Strait of Bosphorous and the Mediterranean Sea.

"After the start of the Russian special military operation, Ukrainian naval forces had deployed barriers of mines around the ports of Odessa, Ochakov, Chernomorsk and Yuzhny," said the FSB security service in a statement, noting that the mines are "dilapidated" and were manufactured in the first half of the 20th century.