Romania relies on Black Sea Gas

Isr

Invisible but precious: gas from the Black Sea is making its way through a labyrinth of brand new pipes, fuelling Romania’s hopes of doing without Russian supplies.

In Vadu (southeast), a processing plant was inaugurated on Tuesday with great fanfare. Mark Beacom, CEO of Black Sea Oil and Gas (BSOG), emphasizes the challenges associated with such extraction, with the conflict in Ukraine nearby.

“There is certainly an impact: mines have been detected near our platform, planes and warships pass by,” he worries. But Romania is proud to set an example in Europe.

The Prime Minister, Nicolae Ciuca, hailed “a decisive step to ensure energy security” at a time when war is threatening international gas supplies.

Owned by the American Carlyle International Energy Partners and the European Bank for Reconstruction and Development (EBRD), the company started two weeks ago to tap into underwater deposits, the first project developed in the Romanian sector of the Black Sea in 30 years.

Its drilling platform, the result of a 400 million dollar investment, supplies 3 million cubic meters of gas per day, which is “10% of Romania’s gas needs”. BSOG expects to operate for about ten years.

“Produce locally”

“Today, we are facing an emergency of security of supply. We have to put our old devils in the closet and start producing locally,” Thierry Bros, an expert on energy and climate at Sciences Po Paris, told AFP.

“We must relaunch the projects in the Black Sea, the production of gas in Norway, in the United Kingdom we must think of launching the production of shale gas and in France that of mine gas,” he enumerates.

In this perspective of emancipation from Moscow, Mr. Beacom hopes that the “state-of-the-art” infrastructure set up by his company will be used for future gas projects or the development of renewable energy in the Black Sea.

BSOG holds two concessions approximately 120 km from the Romanian coast. Ironically, the International Court of Justice (ICJ) in The Hague awarded part of the concessions to Romania in 2009. Thus, it has put an end to an old dispute with Ukraine.

An exception within the European Union, this Balkan country has significant onshore and offshore reserves, but must still turn to Russia in winter to cover about 20% of its consumption. Although Romania estimates the offshore potential at 200 billion cubic meters of gas, investors are cautious.

End of guaranteed energy?

The Austrian group OMV and its Romanian partner Romgaz, which has just taken over from the American giant ExxonMobil, have yet to decide whether they will go ahead with the Neptun Deep project, which is estimated to contain between 42 and 84 billion cubic metres.

Bucharest hopes that the two groups will start extraction as early as 2026, which would allow the country to “become totally independent in terms of gas” and even export the surplus to its neighbors, according to Energy Minister Virgil Popescu.

With a sizeable windfall for Romania, one of the poorest countries in the EU: a 2018 study by the auditing firm Deloitte put the revenue at $26 billion in government revenue over a 23-year period of planned operation.

After a great deal of prevarication, in May the Parliament finally amended a law unfavourable to offshore investments, which had led ExxonMobil to withdraw from Neptun Deep at the end of 2021, after having invested about $2 billion in it jointly with OMV.

“If we want to win against the Russians, we need energy,” says Bros. He believes that the days when “energy was guaranteed” in the EU may be over.

“The impact on our way of life will be extremely significant,” he stresses, and if other solutions are not implemented, “our citizens, affected by inflation and economic crisis, will turn away from Ukraine.”

Articles qui pourraient vous intéresser

gaz

Israel and Lebanon: What are the Gas Issues?

On Sunday 05 June 2022, an FPSO Energean vessel entered the maritime area disputed by Lebanon and Israel, provoking a political crisis. The exploitation of the Karish field, as well as the exploration of the gas potential of the area, is a major issue for the region. In the midst of a boom in European gas demand, the two countries are negotiating from their maritime border, a decades-old dispute. Lebanon and Israel negotiate their maritime border The arrival of the Energean ship to exploit Karish has reignited the dispute over territorial waters between Israel and Lebanon. Thus, Lebanon has stated that it considers any exploitation activity in the area under discussion as an act of aggression and provocation. Under these conditions, the two countries accepted American mediation in order to find a compromise and fix their border. American diplomat Amos Hochstein, who arrived on June 13, is the special envoy and coordinator for international energy affairs. He is responsible for mediating the issue of the Israeli-Lebanese maritime border, i.e., overseeing the indirect negotiations. The objective is to avoid escalating tensions between the two countries, which are still officially at war. This framework is also intended to avoid the intervention of...

gaz

Gas: Cooperation between the US and the EU

Russia's invasion of Ukraine and sanctions against Moscow are disrupting European gas supplies. 12 EU countries are experiencing a reduction, if not a stoppage, in supply. Reducing European dependence on Russian gas Since April, Gazprom has interrupted gas supplies to Poland, Bulgaria, Finland, the Netherlands and Denmark. The latter refused Moscow's desire to introduce a new payment mechanism based on the ruble. Recently, on June 16, Gazprom reduced gas flows to Germany via Nord Stream. Thus, it only works at 40% of its capacity. In addition to Germany, this reduction in flows has had an impact on other European countries such as France, Austria and Slovakia. Thus, this context underscores the importance of collaboration between the United States and the European Union. Joe Biden and Ursula von der Leyen, President of the European Commission, declared that they would act to end the EU's dependence on Russian energy. In fact, Russia uses its gas as a political and economic weapon. Moscow is thus exerting strong pressure on the energy markets. As a result, consumers are experiencing soaring prices and global energy security is threatened. While both presidents recognize the "enormity" of the challenge, they are aware of the need for such...

torchage du gaz au moyen-orient

Kurdistan: Rockets fired at gas fields

In the Kurdistan region of Iraq, the Khor Mor gas fields were hit by rocket fire. Attacks on the KRG 's energy infrastructure are intensifying. Kurdistan's energy sovereignty is a major point of tension between Baghdad and Erbil. New attacks in Kurdistan The Khor Mor gas field in Iraqi Kurdistan was the target of a rocket attack. The attack caused no human casualties or property damage, but it was the third in a week. On June 22, a small rocket fell near the field, slightly injuring two Dana Gas contractors. A second missile attack took place on June 24, affecting residential facilities operated by the company. We are indeed witnessing an intensification of attacks. The field in question is operated by the UAE company Dana Gas. It produces 450 MMcf/d, or about 12.7 million cubic meters per day. Yerevan Saeed, a research associate at the Arab Gulf Institute in Washington, told S&P Global Commodity Insights that the Khor Mor attacks, as well as other recent strikes targeting other Kurdish oil and gas infrastructure, are not necessarily sanctioned by Baghdad. They could thus come from Shiite militias, who are trying to undermine the KRG and reassert federal authority over the Kurdish...

GNL

LNG: Increase in US Volumes

According to a note from S&P Global Commodity Insights, the LNG sector is booming in the United States. The country benefits indirectly from the war in Ukraine. International gas buyers are increasingly turning to the United States. They want to lock in long-term LNG volumes. This situation therefore implies an increase in the number of supply contracts and investments in infrastructure. Multiplying LNG supply contracts First, U.S. LNG supplier Venture Global announced two 20-year sales agreements with Chevron that represent an LNG supply of 2 million tons per year. They will come from the two export modules Plaquemines LNG and CP2 LNG, each with a capacity of 1 million mt/year. In addition, Venture Global also signed a 20-year contract with the German company EnBW. It consists of the supply of 1.5 million tons per year of LNG. Exports will take place through the two modules mentioned above by 2026. This is the first long-term direct purchase agreement for US LNG by a German company. Second, Chevron is diversifying its separate LNG sales agreements. The company will trade with Cheniere Energy. These agreements will represent a combined supply of 2 million tons per year. The first contract is for the supply...