Trend's exclusive Interview with Virgil-Daniel Popescu, Romanian Minister of Energy on the occasion of the Southern Gas Corridor Advisory Council's meeting in Baku, Azerbaijan

Southern Gas Corridor's importance

The start of gas supplies from Azerbaijan to Europe is not only the peak of the combined efforts of all the countries involved in the implementation of this infrastructure project, but also an extremely important turning point for the European energy landscape from the perspective of diversifying the sources and gas supply routes. The Southern Gas Corridor is a project that has been constantly supported by Romania from the very beginning, which has taken shape with every year, proving more and more its importance for Europe's energy security. It has become operational for a year so far, a year of an extremely difficult European and global energy context in terms of security of energy supply, in which its importance and efficiency has been proved beyond doubt, and I congratulate you on this. Natural gas prices in Europe and around the world have reached unprecedented levels. Along with the liquefied natural gas, the Azerbaijani gas volumes transported through the infrastructure of the Southern Gas Corridor came as a safety net for many states in the region. Moreover, the announcement of H.E. Mr. Ilham Aliyev, President of the Republic of Azerbaijan, on the availability of the Republic of Azerbaijan to supplement the Azerbaijani gas volumes transported to the European market, could be put into practice as an alternative source of supply, much desired by many countries in Europe.

Prospects for expansion of Southern Gas Corridor

Romania is interested to be part in the efforts aiming to implement the second phase of development of the Southern Gas Corridor and reiterates on the occasion of the Eight Advisory Council of the Southern Gas Corridor Meeting the solid proposal to include the transport infrastructure offered by the Interconnector between Romania and Bulgaria and the BRUA gas pipeline in the plan to expand the Southern Gas Corridor towards the Balkans and Central Europe. The BRUA gas pipeline, a project of strategic importance at regional level, creates in practical terms the technical and economic opportunities to transport the gas volumes from the Caspian region using the Interconnector between Romania and Hungary further to the Central European markets. BRUA has a number of important advantages. First of all, it is an already completed gas infrastructure. Moreover, it connects markets with significant consumption potential. Thirdly, the proposal to use the BRUA gas pipeline successfully complements the gas transmission Interconnector between Greece and Bulgaria. We hope that Bulgaria and Greece will fulfill their commitments and take all necessary steps to complete the Interconnector between the two countries, according to the new announced deadline. We are convinced that this proposal is in line with the development strategy of the Southern Gas Corridor and we desire for a positive assessment, as well as support and openness for the start of discussions in the near future between all the stakeholders on the options that the Interconnector between Romania and Bulgaria and the BRUA gas pipeline could provide them.

The expansion plans of the Southern Gas Corridor are of significant importance, as new gas suppliers are needed in the Balkans and South-Eastern European countries, which still depend on a single source of supply. This project has gained new opportunities of development acknowledging the growing interest of many states in the region to access the Azerbaijani gas volumes that could reach the European market. It goes without saying that it not a matter of competition looking at the huge gas volumes arriving in Europe from the traditional source. But an enhancement of the Southern Gas Corridor transmission infrastructure by implementing the second phase of development, which will significantly increase the gas volumes from the Caspian area on the European market, is an extremely valuable process for the Europe's energy security. However, the plan for the expansion of the Southern Gas Corridor must capitalize on and take into account as soon as possible the opportunities and needs of the European gas market, given the clear direction set at EU level for the energy sector from the perspective of limiting fossil fuel use to reach a low carbon economy.

New opportunities for energy cooperation

Romania appreciates the Strategic Energy Partnership with the Republic of Azerbaijan and the long and extremely fruitful collaboration in the energy sector, as well as the active participation of the Republic of Azerbaijan in the joint efforts to increase Europe's energy security, especially through its key role in the successful development and completion of the Southern Gas Corridor. Moreover, Romania appreciates the energy cooperation with Republic of Azerbaijan as a strategic component of the bilateral dialogue, with significant impact for the development of regional cooperation. Romania and Azerbaijan have a significant potential for strengthening their relations in the field of energy on the basis of traditional ties. Given the existence of untapped real potential for cooperation, direct dialogue with partners in Azerbaijan may allow the identification of new directions for cooperation in the energy sector. In both countries, we have very good specialists in the energy sector and we can design energy projects mutually beneficial to support the economic development of our countries. We are interested in a more significant presence of Romanian companies in the Caspian area, including on the Azeri market. We would like also to see a larger presence in Romania of the companies from Azerbaijan.

SOCAR’s operation in Romania

Since 2011, the SOCAR Company has been involved in Romania in the development and consolidation of a gas stations network at national level. I am convinced that following the significant investments made by SOCAR, the company has become an important landmark in the fuel market throughout the country. I would like to emphasize that beyond the entry of a world-class player on the Romanian fuel market, SOCAR's presence on the Romanian market is welcome for Romanian consumers. Stronger competition is always good news in the field, leading to lower fuel prices and guaranteeing better services in the retail business. We enjoy that Romania is one of the priority directions for the development of SOCAR`s business, not only in the area of retail operations but also in terms of the transport of Azerbaijani natural gas to Europe. SOCAR is carrying out important projects in Romania and I would like to take this opportunity to reassure that Romanian energy market offers huge opportunities for any investor who creates jobs and makes substantial investments in both upstream as well as in the downstream segment. Moreover, SOCAR Company could analyze the multiple opportunities to expand its fields of activity in Romania, in the light of the new European paradigm of boosting national economies by obtaining energy from low carbon sources.

New sources of gas for Southern Gas Corridor

The very good bilateral relationship between Romania and Azerbaijan was an essential factor in the process that led to the entry of SOCAR on the Romanian market. Although SOCAR's activity focuses mainly on the offshore perimeters of the Caspian Sea, the Black Sea is an important energy bridge between Caspian region and the European market. Romania holds a strategic position in the Black Sea area and has the capacity to contribute to the transit of energy from the Caspian Sea and the Mediterranean Sea towards Central and Eastern Europe. Moreover, the Black Sea has significant natural gas reserves and can be an area of interest in the context of Azerbaijan's substantial and constant efforts to identify new perimeters to supply the Southern Gas Corridor. That could be a viable direction of action to diversify the supply sources for this project beyond those in the Caspian area. Establishing an energy transport Corridor between the Caspian Sea and the Black Sea, that would capitalize on the energy resources from the Caspian Sea area, on one hand, and the strategic position of Romania at the Black Sea as well as the significant resources from the Black Sea, on the other hand, has a significant potential of increasing regional energy security and also for the European Union in general. I would like to mention also that ROMGAZ, the Romanian gas producer, has concluded the negotiations and reached an Agreement with ExxonMobil on the terms and conditions related to the share package acquisition in the Neptun Deep perimeter from the Black Sea and the transaction will be completed by the end of this current quarter. We also hope to start the gas production as soon as possible this year in the Midia perimeter from the Black Sea, with 1 bcm / year.

Cooperation in the renewable energy sphere

At European level, the energy sector is going through the process of transition to a decarbonized and long-term sustainable economy. The role of oil and gas will change in a climate-neutral economy, but both will retain a significant share in the energy mix in the transition process. Both the Caspian Sea and the Black Sea have been recognized as having significant offshore wind potential and the two countries may include in their development strategies important investments in this field and could initiate discussions and exchanges of experience about the development of this sector. We know that Azerbaijan has set ambitious targets for the share of renewable and alternative energy in the total energy consumption mix and has under consideration the implementation of some important projects. Romania has a significant potential in terms of wind, hydro, solar, geothermal or biomass sources and important projects are underway or undergoing assessment. Romania's energy priorities will focus on new investments needed to increase the contribution of renewable energy in the energy mix, including exploiting the potential of offshore renewable energy in the Black Sea, large-scale storage of electricity and use of hydrogen. Recent assessments regarding the Black Sea coast area estimated that Romania’s offshore wind potential at the Black Sea is of over 70,000 MW. Romania is also interested in developing of hydrogen produced from renewable and low carbon sources and appropriate infrastructure. In many places, renewable energy sources are already competing successfully at market prices with fossil fuel-based technologies. Oil and gas companies need to consider expanding their business area by investing in renewable energy projects and I am convinced that future discussions between relevant companies from our countries will enable us to identify and put into practice important projects in this challenging and promising sector.