This report, prepared by independent experts Vasile Iuga and Radu Dudău with the support of FPPG, analyzes the current gas system in terms of reserves, infrastructure and the natural gas market. The report also discusses the outlook for the different segments of natural gas consumption up to 2030 and provides recommendations for policies and regulations that will lead to a higher utilization on the Romanian market, in the largest possible proportion, of the anticipated production from the recent discoveries in the Black Sea, as well as from onshore fields.
Outlook for Romania
As a member state of the European Union, Romania has chosen the path of liberalization of the natural gas market and interconnection of the NTS with the transmission networks of neighboring countries. This has attracted significant Romanian and international investments in the exploration and development of new fields, which have consolidated the high long-term availability of natural gas in the national economy. Moreover, developments on the international markets towards more flexible contracts and multiplication of sources are likely to reinforce this conclusion.
Gradual integration into the single European gas market is clearly to the benefit of final consumers, who can benefit from the effects of robust competition between multiple sources of supply and between services in the supply market. The fear that the interconnection of markets will lead to a significant increase in end-consumer prices is not justified. Bi-directional interconnection leads to a trend towards equalization of gas prices at regional level, but it is much more important that the state ensures fair, transparent and effective protection of vulnerable consumers through social protection mechanisms, not regulated energy prices.
The development of the natural gas sector is also favored by market trends: the move towards decarbonization of the energy sector, flexibility in electricity generation, complementarity with renewable energy sources, geographical distribution and scalability/modularity of capacities, etc. But the importance of energy policies, legislative and regulatory decisions remains decisive. At present, a number of such decisions are of a decisive and urgent nature: the establishment of a fair, competitive and stable fiscal framework for the upstream segment; further liberalization of the gas market and the creation of a transparent and liquid trading platform; the development of essential gas infrastructure (NTS, underground storage, interconnectors) and interoperable rules for the operation of the gas system, etc.
The realization of these conditions depends to a large extent on the exploitation for the next decades, at least, of a substantial potential of natural resources, with significant economic impact on the Romanian economy. Well-paid jobs, substantial contributions to the state budget, the elimination of energy security risks and the possibility of acquiring a prestigious and influential regional position in the energy sector depend on this.
