Trend's exclusive interview with Romanian Secretary of State Iulian-Robert Tudorache ahead of the 5th meeting of the Southern Gas Corridor Advisory Council in Baku
Question: Romania will be able to receive Azerbaijani gas via BRUA pipeline. How much Azerbaijani gas do you expect to receive via this pipeline? How do you asses the significance of cooperation between Azerbaijan and Romania in this context?
Answer: Romania particularly appreciates the active participation of the Republic of Azerbaijan in the joint efforts to increase Europe's energy security, as well as the decisive role in the development of the Southern Gas Corridor.
The BRUA project will physically ensure the continuous bidirectional flow between Romania, on one hand, and Bulgaria and Hungary, on the other hand, at the following capacities:
transmission capacity to Hungary of 1.75 bcm/year, respectively of 1.5 bcm/year to Bulgaria, after the completion of Phase 1;
transmission capacity to Hungary of 4.4 bcm/year, respectively of 1.5 bcm/year to Bulgaria, after the completion of Phase 2.
I want to highlight that last year, at our first participation to the meeting of the Advisory Council of the Southern Gas Corridor, we proposed to the Consortium to take into consideration, for the future stages of expansion, the infrastructure offered by the Interconnector between Bulgaria and Romania and the BRUA pipeline. Having in mind the excellent progress of the BRUA project, at this year’s meeting we would like to propose to the Advisory Council of the Southern Corridor the evaluation of the interest in signing a Memorandum of Understanding to explore the opportunities for using the transport infrastructure provided by the RO-BG Interconnector and the BRUA pipeline, in the forthcoming stages of expansion of the Southern Gas Corridor. This would have a positive impact for many countries in the region, in terms of increasing regional energy security, diversifying sources and routes of energy supply and reducing the energy vulnerabilities. The link between BRUA and SGC is in line with the interests of extending the Southern Corridor infrastructure to the Balkans and Central Europe through a safe and efficient transport infrastructure.
More than that, in the context of Romania`s permanent efforts to increase its energy security, the Romanian public-owned company ROMGAZ, which is the greatest producer and the main natural gas supplier in Romania, have in plan to send a Letter of Intent to the Southern Gas Corridor Consortium related to the interest in purchasing gas from the volumes that will be transported through this infrastructure.
Q.: At what stage is the implementation of the BRUA pipeline project?
A.: Along with the Interconnector between Romania and Bulgaria, BRUA project has a significant relevance at the regional level, assuring the possibility of integrating the natural gas sources from the Caspian Region with the Central and Western Europe, after the completion of the natural gas infrastructure projects of the Southern Gas Corridor. BRUA is a very important component of the Vertical Corridor which will integrate the gas transmission systems from Greece, Bulgaria, Romania and Hungary. This is why BRUA pipeline is an essential link in the context of Azerbaijani gas transmission towards Europe.
BRUA has three execution phases. Once the phases 1 and 2 are completed, a new gas corridor for the Caspian Sea gas will be created, stretching from the Southern border of Romania, further through to the North-Western border of Romania with Hungary. In concrete terms, the phase 1 of BRUA consists of a 479 km pipeline on the territory of Romania and three Gas Compression Stations, assuring bidirectional gas flow. I can tell you that the BRUA project has progressed very well so far: we are in the full process of implementation of phase 1 and the works on the territory of Romania are on the agreed schedule, some of them being even finalized in advance. The works on the compressor stations started in April 2018 and the pipeline construction works started in August 2018. The estimated deadline for the completion of Phase 1 works of the BRUA project is December 2019.
We have made sure that BRUA receives all necessary funding, in a timely and efficient manner. TRANSGAZ company has obtained two grants from the European Union through the National Agency for Innovation and Networks (INEA). The first grant was granted for financing the design for the three compression stations within the project and the second, more than 180 million EUR, was granted to finance the BRUA Phase I project implementation. The project is also funded by loans from the EIB and EBRD. This shows the importance of the BRUA project for the future energy map of Europe.
Q.: How do you asses the operation of SOCAR in Romania? In which sphere are you interested in expanding SOCAR' activities in Romania?
A.: SOCAR is involved in key European energy projects designed to increase Europe's energy security. We can only enjoy the fact that Romania features among the priority directions of SOCAR business development, not only in the area of retail operations, but also as regards the transmission of Azerbaijani natural gas to Europe.
SOCAR has been involved in Romania since 2011 and currently operates a growing distribution network on the market, with more than 40 gas stations throughout the country. I am convinced that, following the significant investments SOCAR has proposed, the company will become an even stronger player on our market.
I would like to emphasize that the presence of a leading company such as SOCAR on the fuel market in Romania is very welcomed by the Romanian consumers. Stronger competition is always good news in the field, leading to lower fuel prices and guaranteeing better services in the retail business.
I can tell you that during the recent discussions between the representatives of ROMGAZ and SOCAR several ideas have been put forward for future cooperation. These involve the off-shore gas exploration and exploitation in the Romanian sectors of the Black Sea, if the Romanian company will decide to be involved in this project in the future. It was also mentioned the opportunity to cooperate in the projects related to the TANAP and TAP pipelines, important components of the Southern Gas Corridor. The Romanian company ROMGAZ expressed the interest to collaborate with SOCAR in the on-shore area on the territory of Azerbaijan and also in the off-shore area from the Caspian Sea. Another important direction of cooperation identified is the natural gas underground storage sector, taking into consideration the similar situation in Azerbaijan and Romania – around 3 bcm storage capacities.
Also, considering the potential of the Caspian Sea gas fields, we may state that TRANSGAZ, the Romanian company operating our national gas transmission system, has set ambitious goals in this respect in its Ten Years Network Development Plan. Once the link between the Southern Gas Corridor and the Vertical Gas Corridor will be physically established, Caspian gas volumes could be delivered to the Romanian, to the neighboring and to the Central European gas markets.
Q.: What are the ways of eve more expending the energy cooperation between Azerbaijan and Romania?
A.: A time reference point in our bilateral relationship was the signing on September 28, 2009, by the Presidents of the two countries, of the "Declaration on Establishing a Strategic Partnership between Romania and Republic of Azerbaijan", on the occasion of the official visit to Romania of His Excellency Mr. Ilham Aliyev. The Action Plan for the implementation of the Strategic Partnership between Romania and the Republic of Azerbaijan was signed also in Baku in 2011.
Romania and Azerbaijan have excellent cooperation relations and a very strong Energy Partnership. The cooperation between Romania and Azerbaijan is of particular importance considering especially the possibility to diversify the gas supply sources and implicitly to increase the energy security.
Both TRANSGAZ and ROMGAZ, two of the most important Romanian companies in the natural gas sector, have long-standing cooperation relationships with SOCAR. For example, to better structure the existing cooperation, TRANSGAZ and SOCAR have signed in 2016 a Memorandum of Understanding with the view of joint participation in projects of wide regional interest and in the context of linking the Southern Gas Corridor to the Vertical Corridor.
There is undoubtedly a significant potential for cooperation between our countries in the energy sector and important opportunities were recently identified at the companies’ level: the underground gas storage, cooperation in on-shore and offshore Caspian gas projects, cooperation in the exploration and exploitation of gas volumes discovered in the Romanian Black Sea area, development of cooperation in the fields of research, operation, design, dispatching, maintenance, including potential future common approaches to the development of the Shah Deniz 3 field and in the context of SOCAR participation as shareholder in major projects such as TAP, TANAP etc. We also envisage setting up a Joint Working Group, maybe even tripartite with the participation of our Bulgarian partners, for the configuration of the Azerbaijani gas routes to Bulgaria and Romania. For TRANSGAZ, SOCAR can become a bridge to Azerbaijan and the Caspian region. For SOCAR, TRANSGAZ can create the necessary infrastructure for a safe and efficient gas transport corridor to the European market. As I mentioned before, the pre-conditions for the gas from the Azerbaijani Shah Deniz fields to reach the Bulgarian, the Romanian and Central European gas markets are in place. To this effect, new strategic partnerships with SOCAR could be developed.
We have to admit that it is a moment when we are discussing extremely interesting developments in the regional and global energy landscape. That is why, I wish that all the experience that Romania has accumulated at the national level in the energy sector over the past 100-150 years, as well as the long tradition that the Republic of Azerbaijan enjoys in the energy sector, especially in the oil and natural gas sector, to lead to a much higher level of cooperation, to a much stronger ambition of local companies in our countries to put into practice projects of common interest. I want Azerbaijani companies to invest more in Romania, as well as Romanian companies to be more present on the Azerbaijani market, to identify and to capitalize on the business opportunities and to be able to play a significant role in the region, including with a view to ensuring energy security. And I think we have both in Romania and Azerbaijan many national companies that can do this successfully.
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