Gas imports from Russia reached about 40% of Romania’s total gas supplies on Thursday, the 5th of August, and this is an absolute first for our country in the hot season. Romania used to import a similar percentage a decade ago, but only during winter months with extreme frost, and when industrial consumption was higher than now.
According to Transgaz interactive data, 13.3 million cubic meters of Russian gas from Bulgaria enters the country via Turkstream, of which 12.6 million cubic meters via the Negru Voda point and another 0.7 million cubic meters via the Ruse point. Domestic production, Romgaz plus Petrom, is 22.1 million cubic meters, making total gas sources 35.4 million cubic meters, of which imports alone account for 37.5%.
There are also gas exports to Hungary, of 4.6 million cubic meters, at roughly the same level throughout this summer, all of which comes from imports, with Romania acting as a transit country for Russian gas towards the West. Hungary does not only import from Russia via the Romania route, but our country has been a constant route through which its neighbors have been getting access to this raw energy source for most of this year.
It should be recalled that Gazprom has abandoned the Ukrainian, and by default the Romanian route from Dobrogea (Isaccea- Negru Voda) for transporting its gas to customers in southern Europe as of the beginning of 2021, replacing it with the newly completed and functional Turkstream. Romania, through Transgaz, had in the meantime completed an investment in reverseflow on T1 Negru Voda (one of the three pipelines crossing Dobrogea), so that it could bring gas from Bulgaria, which is why this route is now Romania’s most important import route.
One explanation for these large gas imports is that suppliers turn to Gazprom to build up their gas stocks for the winter, because the Russians sell gas cheaper than what Romgaz and Petrom put on the market. In fact, according to Russian data, Romania had the lowest level of Russian gas prices in the EU in Q1. According to Transgaz, on Thursday, August 5th, more than 16 million cubic metres were stored, a level higher than all imports and almost as much as all domestic production.
This year, according to market reports, stock levels were on average lower than last year, as ANRE abandoned the imposition of mandatory minimum stocks per supplier, liberalizing the winter storage market and leaving it virtually up to each company to decide what to set aside for winter deliveries. As a result, firms have not rushed to build up stocks to the same level as last year and are now probably trying to catch up, given that the deadline for the end of the storage cycle is 31 October.
Romania usually consumes 10 to 11 billion cubic meters of gas a year, with another 1.5 billion coming from imports. This year, the amount of imports will certainly be higher. Production is split almost equally between Romgaz and Petrom.
From the end of this year, a third major source of gas could emerge, from the Black Sea, where the American company Black Sea Oil and Gas (BSOG) has announced it will start extraction from the Midia perimeter, where production is estimated at 1 billion cubic metres a year.
One more source, in fact potentially the largest, is uncertain. Petrom and probably Romgaz have not put forward a start date for production from the Trident perimeter in the Black Sea, with reserves of over 120 billion cubic metres and a possible annual production of 6-8 billion cubic metres, because whichever consortium will exploit the Black Sea resources is first waiting for the amendment of the Offshore Law, a promise with which the PNL-USR government came to power. For now, however, it is unclear whether Romgaz will buy ExxonMobil’s 50% stake in the project company holding the Trident licence. It is likely that the offshore law will be amended after this deal is completed, which would mean that the first gas will not come out until 2025-2026, as Petrom chief Christina Verchere said recently.
As for pipeline connections with its neighbours, Romania is linked to Ukraine at Isaccea and Medieșul Aurit, to Moldova at Iasi, to Bulgaria at Negru Vodă and Giurgiu, and to Hungary at Csanadpalota.
Translation by: Service For Life S.R.L.