Romania's Transgaz Inks Deal with Brussels
Romanian gas transmission system operator Transgaz has offered commitments to the European Commission (EC) to address the latter's concerns about the free flow of gas from Romania. The EC said September 21 it is inviting comments on these undertakings provided, which it said would enable gas exports from Romania to other EU countries particularly to Hungary and Bulgaria.
After a formal investigation opened in June 2017, the EC said it had concerns that state-controlled Transgaz might have breached EU competition rules by restricting gas exports frrom Romania. It said such restrictions may have taken place by delaying the construction of infrastructure needed for exports and by making exports commercially unviable through increases in interconnection tariffs.
Transgaz now has offered commitments that would allow commercially meaningful export capacities from Romania to be made available for the first time, the EC said, in particular:
- to increase the export capacities from 0.1bn to 4 bn m3/yr at interconnection points with Hungary and Bulgaria and guarantee these as minimum firm (uninterruptible) capacities;
- to ensure that its tariff proposal to the Romanian national energy regulator (ANRE) will not discriminate between export and domestic tariffs;
- to refrain from using any other means for hampering exports.
Such commitments would remain in force until the end of 2025 and a trustee would be in charge of monitoring Transgaz' compliance with them.
EU competition commissioner Margrethe Vestager said: "Gas consumers across the EU should enjoy the benefits of an integrated and competitive single European energy market. We are assessing whether the commitments proposed by Transgaz would promote the free flow of natural gas in southeastern European markets at competitive prices...We want to hear stakeholders' views before taking any decision." The probe could be called off if the commitments are judged suitable. If a company breaks commitments, the EC can impose a fine of up to 10 % of its turnover, without having to prove any infringement.
Yet while Transgaz is offering to free up Romanian gas exports, the Romanian government recently tabled a new law that envisages new producer taxes and restrictions on exports. It prompted would-be investors in key offshore gas developments, such as ExxonMobil and OMV-Petrom in the Neptun field, and Carlyle-backed BSOG in the Midia field, to reassess whether they will proceed with their projects.
The Hungarian government meanwhile is blocking the planned BRUA gas pipeline project that could enable Romanian gas be exported to Austria and Hungary. Transgaz backs BRUA - designed to connect Bulgaria, Romania, Hungary and Austria - the initial capacity of which would be 1.75bn m3/yr, rising in the future to 4.4bn m3/yr.
Romania is the third largest gas producer in the EU (after the Netherlands and the UK) and has significant gas reserves, including recent fields in the Black Sea, the EC says. According to BP's latest Statistical Review of World Energy, Romania produced 10.3bn m3 in 2017 (up 14% on 2016) but consumed 11.9bn m3, making it a net importer. So new field start-ups in the 2020 may make it a net exporter.