Romania takes steps to expand gas infrastructure

This article is provided courtesy of Newsbase.

Romania ’s lower house of parliament last month adopted a bill that is designed to fast-track the development of natural gas infrastructure.

The draft law will overturn a ban on the construction of gas pipelines in coastal areas, including beaches. If passed, it would allow Romania to connect upstream projects in the Black Sea with the national gas grid. The bill requires the approval of both houses before it can become law. There has been a revival in offshore drilling in the southern European country in recent years, which culminated in the discovery by ExxonMobil and OMV Petrom of 42-84 bcm of gas at the Neptun block in 2012.

More recently, a joint venture between Russia’s LUKoil and local producer Romgaz reported a 30 bcm find last October at the EX30 Trident block. After two years of rising yields and falling demand, Romania is now on the verge of achieving a stable gas surplus. This will allow the country to begin exporting gas once the necessary infrastructure is in place. At present, however, Romania can only ship limited volumes to neighbouring Moldova.

Under last month’s bill, Bucharest would also exempt gas projects of national importance from having to seek approval from landowners before they are implemented.

This would apply to the Bulgaria-Romania-Hungary-Austria (BRUA) corridor, a planned network of pipelines listed under the EU’s Projects of Common Interest (PCI) programme.

Under the first stage of BRUA, around 550 km of pipeline will be built in Romania from Arad near the Hungarian border to Podisor, near Bucharest. The work is slated for completion in 2019 at a cost of 448 million euros (US$504 million).

Earlier this month, Romanian gas grid utility Transgaz secured a 179 million euro (US$201 million) grant under Brussels’ Connecting Europe Facility (CEF) to help finance construction.

Last month also saw Austria’s Habau complete a 2.1-km stretch of pipeline under the River Danube River, which divides Romania and Bulgaria. Bulgaria Energy Ministry Temenuzhka Petkova recently said she was hopeful that remaining work on the Romania-Bulgaria interconnector would be finished before the end of the year. Once fully operational, BRUA will enable Romania to pump up to 1.5 bcm per year of gas towards Bulgaria and 4.4 bcm to Hungary.

The system will be able to tap Romania’s offshore reserves via the planned Black Sea-Podisor pipeline, which is slated for launch in 2019-2020. The 307-km branch will cost an estimated 255 million euros (US$286 million) to build and will have a capacity of 6 bcm per year.

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