Page 34 - bne_Magazine_April_2018

34 I Central Europe
bne April 2018
AUSTRIA
SLOVAKIA
HUNGARY
ROMANIA
BULGARIA GREECE
UKRAINE
Black Sea
TURKEY
RUSSIA
GEORGIA
AZERBAIJAN
Caspian Sea
BRUA project and Hungary’s obstruc- tions on February 27, EU Commissioner for Energy Miguel Arias Canete com- mented in very general terms, saying that the EU supports “any project enhancing the inter-connectivity”. But “the interconnectors have always been a nightmare, because there are so many interests involved,” he added.
The EC indeed extended a €179mn loan to Transgaz for BRUA, which gave a key impetus to the project. But the grant was negotiated as part of
a broader deal involving Romania’s commitment to allow its offshore gas flow to neighbouring countries. And the deal seems to still be under negotiations, judging from Romania’s planned amendments to the gas market design.
Further vocal support from the EU for the pipeline to reach Austria’s gas hub at Baumgarten would be in line with the broad deal and serve both sides: it would help Romania sell its gas on the open market in Austria and contribute to the single energy market. However, the negotiations are complicated by the natural gas companies (specifically OMV) which would prefer to sell their Romanian offshore for export under long-term contracts negotiated bilaterally – an option in principle against the flexibility implied by the single market policies.”
Meanwhile, OMV Petrom CEO Mariana Gheorghe said on February 21 that the company has lost the auction for the allocation of the 4bn cm per year transfer capacity through the Arad-Szeged inter- connector between Romania and Hunga- ry, hotnews.ro reported. Instead, OMV and ExxonMobil are reportedly seeking buyers in Turkey and Ukraine, as well as Bulgaria and Moldova, for the offshore gas they will start producing at the offshore Neptun block in 2020-2021. When commercial production starts at the field, Romania will have the potential to export 8bn cm of gas from its own offshore resources.
“BRUA is no longer BRUA,” Gheorghe also commented, an apparent reference to Hungary’s unwillingness to secure the pipeline’s continuation to Austria.
The point of the BRUA pipeline is to pro- vide gas from Romania’s offshore fields to its neighbours at a fair price – but the negotiations between OMV-ExxonMobil as the main offshore operator, the Romanian government and neighbour- ing countries seem to be at a deadlock at this moment.
The EBRD’s endorsement of the project therefore comes at a critical time. The bank is a firm supporter of the Southern Gas Corridor, having also extended financing for TAP alongside other European development institutions.
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Its €60mn loan for the Romanian section of BRUA was accompanied by broader support given (in partnership with European Investment Bank) to Transgaz with a view to regional development: the EBRD recently teamed up with
the Romanian company in bidding
for Greece’s DESFA gas transport company (which holds a stake in the Bulgarian company developing the Gas Interconnector Greece-Bulgaria ICGB). In addition, the bank, also in partnership with the EIB, will finance Transgaz’s investments in Moldova.
If successful in taking over DESFA, Transgaz would control the import of gas from TAP to Central Europe. The 1.5bn cm of gas potentially imported from TAP to Romania through Bulgaria (this is the maximum capacity of the Romania-Bul- garia reversible interconnector) would, however, be dwarfed by the amount Romania could send through BRUA.
The EBRD weight behind the BRUA project has substituted the lack of support from the European Union, or is hindered by more complex negotiations regarding the single energy market and sharing the benefits from the Black Sea offshore gas.
The European Union has taken a neutral stance vis-a-vis the ongoing negotia- tions. Asked about the stalemate in the