Are we ready for the coming winter? It's a question on everyone's lips. Romania is privileged with its own energy sources and the Black Sea has yet to show its full resource potential. European countries must remain united in the face of what promises to be an extremely difficult winter. On the other hand, things must also be seen in the medium and long term, without losing sight of the energy transition and the huge investments needed. These were the main ideas outlined on the second day of the Romanian International Gas Conference (RIGC 2022), which brought together, in addition to industry experts, energy ministers and other senior officials from 9 countries in the region (Romania, Greece, Bulgaria, Ukraine, Hungary, Republic of Moldova, Azerbaijan, Turkey and Georgia) in an unprecedented meeting in Bucharest.
Below are the main statements made during the day:
- Cătălin Niță, Executive Director FPPG
On the first day of the RIGC, we discussed the European context, what's happening in the energy sector, focused on gas, we discussed the infrastructure we have and what can be improved, we continued with new technologies, we talked about CCS and we ended the day with a very interesting panel where we brought together legislators with energy regulators, discussed with companies and the NBR to see how this crisis will affect Romania further and what can be done to prevent this.
- François-Régis Mouton, Regional Director for Europe, IOGP
Russia's aggression has a very important role on the markets in the current energy crisis. But we must remember that this crisis started before the February aggression, when energy supplies became more complicated.
So a supply problem has become a geopolitical problem. One of the causes is that the European Union has not sufficiently diversified sources. Nothing has been done at EU level to encourage domestic gas production and the EU has increased the demand for gas and oil through an approach that was not connected to reality.
We need proper planning and we need to leave ideologies aside. What I am hearing here in Brussels is that we are preparing to repeat the same mistakes of the past, which is not right.
We must support the most vulnerable consumers and we are ready to contribute to these solidarity efforts. We must strengthen our local production, diversify sources and achieve energy autonomy.
- Adina-Ioana Vălean, European Commissioner for Transport
Crisis is a word everyone uses when talking about the energy sector. I would like to say that the gas infrastructure has shown resilience. We have increased our preparedness in the context of Russian manipulation. We will come out of this crisis stronger.
Infrastructure is ready for the new west-east flow and addressing infrastructure gaps has paid off. First we need to get demand under control, we will accelerate renewable energy production and support long-term partnerships.
We need to support gas production. The Black Sea is an area with potential, along with the Mediterranean basin.
It is essential that all these elements are realized in a sustainable way in order to meet our climate neutrality goals.
- Behrang Shirizadeh, Economic Advisory - Energy Markets & Modeling, Deloitte
Natural gas has an exciting future as it offers us more opportunities in the energy transition. We need hydrogen import terminals with conversion facilities. We can remodel LNG terminals. These systems can decarbonize Europe.
There is a gap between today's green technologies and those of the future. We need public funds and state guarantees to secure the future of these investments.
- Ionuț Ciubotaru, Vice President Business Development Gas & Power Division, OMV Petrom
In our view, natural gas will play a key role in the coming period, not only as a transition solution, but also as a transition facilitator.
In Romania we have a lot of knowledge to develop CCS. It's a great opportunity for our country that we must use.
Turquoise hydrogen is one of the technologies that may even capture carbon better than blue hydrogen. It has the advantage of capturing carbon in solid form - black carbon - which can then be used in industry as a valuable product. It's an alternative that we are exploring and will focus more on in the near future to capitalize on the country's natural gas advantage. Hydrogen - blue and turquoise - is key to Romania's energy transition.
In terms of natural gas availability, our focus is on Neptun Deep. With this project, Romania can become the largest natural gas producer in Europe and we will support the development of the hydrogen economy. We have options for carbon storage, we have programs exploring carbon storage opportunities. We are still evaluating, but these opportunities are there.
- Alexandru Floriștean, Director Hy Legal, Operating Partner Five T Hydrogen
The hydrogen industry is a sector worth billions of dollars. Data on how to produce, transport, store it comes from the gas sector. It's an easy transition for engineers, technicians to switch from natural gas to hydrogen or to work with both. The infrastructure can be adapted for hydrogen transportation. Overall, the natural gas sector has shown a lot of vision. The gas sector has decided not to be on the defensive in the coming decades.
We have reason to believe that Romania can become a regional power in hydrogen production. What do we need to achieve this effect? First, a legal framework.
- Virgil-Daniel Popescu, Minister of Energy
We talked (at the meeting of energy ministers from the region at the Victoria Palace) about future projects on the gas and electricity side, increasing interconnectivity between our countries.
We want to link the Caspian Sea with the Black Sea. We want to have a green electricity corridor, providing electricity to the whole of Europe.
We have 82.6% of full gas storage capacity and are increasing that.
All countries are willing to cooperate and show solidarity to overcome the crisis. But we are also thinking long-term, to do everything together. The key word to remember: solidarity in the decades to come.
- Parviz Shahbazov, Minister of Energy, Azerbaijan
This morning we had very useful discussions with energy ministers, in the presence of Prime Minister Nicolae Ciucă, on energy security issues. We discussed energy security, the short, medium and long-term situation. It is important to think not just about the coming winter, but to be sure about what will happen in 5-10 years' time.
This year we will deliver 40% more natural gas to Europe, that is almost 12.5 billion cubic meters. In the next five years we want to double the supply of natural gas from Azerbaijan to Europe.
In the long term, we have discovered that Azerbaijan, as part of the Caspian Sea area, has a large wind potential of 170 GW, of which 75 GW is in the shallow water area. We have started discussions on this and several projects with different companies in Azerbaijan. We are currently discussing with Romania, Georgia and Hungary ways to transport it to the European market.
Romania is and has been an important oil partner for us. Now Romania will become part of the new Southern Gas Corridor expansion project and we see Romania not only as a country that receives gas from us, but as a potential transit country, for example through projects like BRUA for future gas transportation to other countries. Also, if we deliver large amounts of renewable, green energy, including hydrogen, through this green corridor Through Georgia, the Black Sea and Romania, Romania will become an important player also in terms of transit countries for new green energy resources to other European countries.
- Andrei Spînu, Deputy Prime Minister, Minister of Infrastructure and Regional Development Republic of Modova
Moldova and Ukraine need solidarity. We have no natural resources whatsoever, we have to import. When we are put in a situation where we have to buy on the international market, of course this hits the final consumers hard. We want a new mechanism for those countries which cannot afford to pay huge prices in the short term. We need some financial instruments to get through this winter.
It will be a geopolitical winter, not a market-based winter. It is a winter that will go down in history as such. If we work together, I think we can overcome it and spring will come for us again.
- Kostas Skrekas, Greek Minister of Environment and Energy
Now Russia is blackmailing Europe with a complete cut-off. Europe depends heavily on Russian gas.
I can assure you that Europe will remain united. Europe and Greece will continue to support Ukraine to the end against this devastating Russian invasion.
For the new gas pipeline we have the interconnector with Bulgaria and the start of operation will be marked in a few days. The operationalization of the interconnector will allow us to increase the export capacity from Greece to Bulgaria and from Bulgaria to South Eastern Europe. Greece is an entry point for gas to the Balkans and Bulgaria is a transit area to the rest of South East Europe.
- Rossen Hristov, Minister of Energy, Bulgaria
The problems are cross-border. Infrastructure investment is a key priority for all. This will allow us to get gas from different sources, limiting our dependence on Russian gas. In Bulgaria we are working hard on this. At the moment, we are not receiving any more gas from Russia, although the contract is open and we would like to receive the remaining quantities.
Our priority: to switch to gas from Azerbaijan, Turkey, LNG, that's why we are focusing on opening the Greece-Bulgaria interconnector on time and we also have the Alexandroupolis infrastructure project, in which the Bulgarian state has 20%.
- Mykola Kolisnyk, Deputy Minister of Energy, Ukraine
We express our gratitude to the Romanian people for all the support received during this difficult period. We have had this situation before with the 2014 bullying and we understand how we need to prepare to face all challenges. We are preparing for a situation where we will get zero gas from Russia, which will not be surprising, but we have to show solidarity because there will be regional effects.
We have done our homework for all gas scenarios. We have prepared interconnection with neighboring countries, we have streamlined all existing infrastructure. The transportation system was designed from east to west. Now we have improved from west to east, so reverse flow. We are focusing on new gas flows - from Norway, from the Caspian Sea, so there will be a new market.
- Péter Sztáray, State Secretary, Ministry of Foreign Affairs and Trade, Hungary
We are facing a crisis that will affect everything, including suppliers, and in times like these it is important to cooperate with each other more than in times of peace.
- Alparslan Bayraktar, Deputy Minister, Ministry of Energy and Natural Resources, Turkey
We focus on renewables, energy efficiency and gas. We believe natural gas will play a key role in Turkey's energy transition.
- Christina Verchere, CEO of OMV Petrom
The Neptun Deep project is a game-changer for our company and for the country as a whole, in terms of the energy security it provides and the fact that it transforms the country into a regional hub. The project is essential for the country as onshore gas production is in decline and it is important to see new sources.
We need to overcome these challenges and bring as much benefit to the country as possible, because that is the purpose of resources, to serve the country. There has to be the right regulatory framework. When there is not, the appetite for investment is reduced.
- Răzvan Popescu, CEO, Romgaz
It takes a long time from when the investments start and the gas is actually produced. So there needs to be a clearer vision. Right now, we don't know what the future looks like. For now, the market is disrupted.
The development of gas in the Black Sea is a goal on which the whole state must focus, given its strategic potential.
- Mark Beacom, CEO, Black Sea Oil & Gas (BSOG)
The potential in the Black Sea is huge. We've seen the geological studies, it's great news to see this potential and further discoveries are much more promising. The ability to find new reserves already exists. But it's useless, if the idea is to discover gas and leave it there for I don't know how long, what's the point? The potential to find reserves is great, but because of the problems related to extraction, the enthusiasm to come and exploit this gas in Romania has waned.
- George Sergiu Niculescu, State Secretary, Ministry of Energy
The Black Sea has a huge potential and in the Ministry of Energy we want to take advantage of the full potential it offers Romania.
The crisis has shown European countries the extent to which they are dependent on imported resources - whether oil, gas or coal. Romania is in a privileged situation. Consumption is almost covered by domestic production and we rely on a small amount of imported natural gas and electricity. So, we are in a privileged situation and we have this opportunity to become an important force in the region, to be a supplier for neighboring countries as well, if we take the right steps.
Are we ready for the coming winter? It's a question I get very often. Additional gas volumes would be welcome, but we can meet the challenges this winter.
At the end of the conference, Franck Neel, FPPG President, summarized:
I saw the ministers' willingness to help each other in the coming months. At RIGC, we discussed energy efficiency, the cheapest KWh, which is the one we save; how we build the missing infrastructure to bring natural gas to South East Europe; we discussed the best way for Romania and the EU (to respond to the crisis - editor's note) - to use the resources we have, especially in Romania.
