Romania has the largest reserves of natural gas in Central and Eastern Europe, however given the rather low annual average production (10.8 billion cubic metres) and taking into account the constant 5% annual decline of energy sources, combined with the replacement rate of 80%, it is estimated that Romania’s proved reserves of gas will run out in the next 9 years, and those of oil in 12 years if no investments will be made for new discoveries of hydrocarbons, as highlighted in mid-September by the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA).
The government has consistently stated over the past 10 years the necessity to reduce dependence on imported gas. However, projects that have been assessed as critical to achieving these goals have not been implemented (i.e, the Nabucco project, the first project on shale gas).
Thus, Romania is still dependent on imports, although in the last two years the gas import has significantly decreased, for the last year the import of gas consumption being of 7.5%.
Following the 2009 gas crisis, the Bulgaria-Austria regional interconnection project, via Romania and Hungary (BRUA), has become a pillar for ensuring local and regional energy security and independence. The BRUA project is developed in the context of the necessity to diversify the gas supply sources of the European countries, ensure the transmission to the Central European markets of the Caspian Sea gas with direct consequences on the security increase of supply of natural gas to Romania by accessing new sources, availability on the Bulgarian direction of a bidirectional transmission capacity, and the development of a transmission capacity in the Hungarian direction.
The “Black Sea shore – Podișor Compressor Station” pipeline is also a European project of common interest, connecting with BRUA by taking over the potential Black Sea natural gas sources.
In this context, starting with September 2016, Transgaz announces monthly auctions for booking capacity on the Negru Voda 1 – Isaccea 1 pipeline. For the months of November and December 2016, Transgaz has announced, via a press release published on its website, the registration on the Regional Booking Platform of the auctions regarding the unbundled capacities offered at the Negru Voda 1 interconnection point with Bulgaria. According to the press releases, the monthly unbundled firm capacity available on November and December for this interconnection point is of 92.007.608 kWh/day.
The need for legislative changes for the energy sector has led to a recent amendment in September 2016 of the Electricity and Natural Gas Law no. 123/2012 through the Government Emergency Ordinance No. 64/2016 (“Ordinance”). The main purpose of the Ordinance is to establish a competitive, transparent and non-discriminatory mechanism for transactions performed on the natural gas market in Romania. A major issue of concern consists in removing of the legal restrictions regarding the natural gas exports starting with 1 April 2017; Romania will thus align the Energy legislation with the European provisions of art. 35 and 36 of the TFEU.
In addition, the timetable for liberalization of the domestic natural gas price for household consumers and for the producers of thermal energy will be removed from 1st of April 2017.
Also, the Ordinance provides the obligation for natural gas producers and suppliers to conclude agreements on the Romanian competitive markets in a transparent and non-discriminatory manner. Therefore, the natural gas shall be traded either on OPCOM, a public company controlled by Transelectrica and the Ministry of Economy, either on the Romanian Commodities Exchange, a private company.
Therefore, for the 1 December 2016 – 31 December 2017 period, each producer who is also a seller has the obligation to conclude agreements for 30% of his own natural gas production on the Romanian competitive markets. For the same period, any supplier who is not a producer, has the obligation to purchase a quantity of a minimum 20% from the natural gas quantity for which sale-purchase agreements are concluded for that period in his capacity as a buyer and to sell a minimum 30% from the natural gas quantity for which sale-purchase agreements are concluded with wholesale consumers.
Clearly, any legislative change especially applicable to a not yet crystallized market will always be subject to pros and cons. But what it is noteworthy is the fact that the private sector is increasingly more interested and active in promoting a transparent stable and non-discriminatory legal framework. Under these circumstances, we can only hope that in the near future the Romanian legislative framework will be uniform, non-bureaucratic and in accordance with the latest international practices of the industry.
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