According to National Energy Regulation’s (ANRE) annual market reports, last year the Romanian market consumed 14.2 billion cubic meters of natural gas, almost 3% more than in 2010. Since the output of the two local producers, Petrom and Romgaz, has dropped by around 7%, from 11.4 billion to 10.6 billion cubic meters, imports from Russia have gone up substantially, from 2.36 billion cubic meters to 3.57 billion, according to ANRE data. The price has also increased from about $360 per thousand cubic meters in 2010 to an average of roughly $442 last year.
In 2011, Romania consumed gas worth around $3.3 billion. The cost of gas produced domestically by Petrom and Romgaz was around $162 per thousand cubic meters, nearly three times lower than the price of Russian imports. “Romania pays the highest bill for Russian gas of all the importing states,” market specialists explain.
$10 billion for eight years
Russian gas reaches Romania through two intermediaries, WIEE Zug and Imex Oil. The former company, registered in Switzerland, is owned by Gazprom and Wintershall (Germany); the latter company is part of the empire of Russian Vitaly Matsitsky, who also controls aluminum producer Alro Slatina. Both intermediaries’ contracts with Gazprom are valid until 2030.
Every year, Romania pays heavy cash for Russian gas. According to information from Romgaz, in 2004-2010, Romania’s bill was $8.5 billion. ZF calculations indicate that last year, gas imports were worth $1.57 billion, meaning the bill has topped $10 billion over the last eight years.
Always the intermediaries
The subject of natural gas intermediaries, just like the energy sector’s other problems, such as Hidroelectrica’s direct contracts, has been in the speeches of every minister in the last few years, but no solutions have been found, despite guarantees that Romania would be able to buy gas directly from Gazprom.
Romania’s bill for Russian gas could grow even higher in the future. ANRE data, cited by MEDIAFAX, indicates the price of gas imports in January-June 2012 will be $493 per thousand cubic meters, 11.5% higher compared with the 2011 average of $442.
The Black Sea and major projects
One way to bring the cost down on the long term is finding new domestic reserves. Already there are encouraging signs from Petrom and American giant ExxonMobil, which in 2009 begun a substantial exploration of the Neptun block in the Black Sea.
The latest information from the two companies says a deposit potentially containing 42 to 84 billion cubic meters has been identified in a deep region of the Neptun block, but it is too early to say precisely whether the deposit can be commercially utilized. Even if production were to start from this deposit, this could only happen in ten years, company official said.
Furthermore, the major projects aiming to bring gas from the Caspian region, like the Nabucco pipeline or AGRI, are many years behind schedule, leaving the market with no supply other than Russian imports.
In terms of consumer categories, the gas market has retained its structure in 2011, compared with 2010. Electricity and heating producers, household consumers and the chemical industry burn the most gas, 3.25 billion cubic meters, 2.93 billion cubic meters and 2.8 billion cubic meters, respectively.
(English version by Radu Bostan)