Romania to form gas partnership with Azerbaijan, Georgia

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Feb. 19 -- The Romanian government expects to conclude a partnership with Azerbaijan and Georgia next month that would allow natural gas to be piped from Azerbaijan to Romania via Georgia.

“In 5 years’ time, Romania will become an energy hub in its geographical region thanks to this project," said Tudor Serban, secretary of state for Romania’s ministry of economy, commerce, and business milieu.

“For the time being, there are partnerships concluded with both countries,” Serban said, adding that a joint-stock company called AGIR also will be established by the three countries’ state oil firms.

Meanwhile, Romania also plans to hold talks with Russia’s OAO Gazprom in March on the setting up of a joint venture for the construction of underground gas storage facilities.

“In March, Gazprom will send specialists to the country to appraise the land plots to be offered by Romania,” said Marcel Adrian Piteiu, the general manager of Romania’s state-owned Romgaz, following talks with Gazprom Deputy Chief Executive Alexander Medvedev.

Earlier, Romanian Minister of Economy, Trade, and Business Environment Adriean Videanu said construction of the gas storage facilities would make it possible to create 5-6 billion cu m of reserves in his country.

Medvedev said the joint venture will be created when Romania finds a suitable plot of land to implement the project. The two sides originally announced the plans to start joint construction of underground gas storage facilities in 2009.

The news underlines earlier reports saying that the Black Sea energy landscape is going to change dramatically over the next 5-10 years, as the region's nations pursue aspirations not only to become transport hubs for oil and natural gas supplies moving into Europe but also to boost their own hydrocarbon output (OGJ Online, Dec. 7, 2009).

As a member of the European Union since 2007 with more than 500,000 b/d of refining capacity and a well-developed oil and gas pipeline system, Romania is said to present an interesting potential access point to European markets for non-EU suppliers, especially Caspian producers.

Romania currently imports about 10 million cu m/day of Russian gas—about 20% of the country's total consumption. Romania produced 11.5 billion cu m of its own gas in 2008, covering 80% of domestic consumption.

Contact Eric Watkins at [email protected].