FOCUS ON LNG: Constanta Port, a transit hub for Europe
- Written by Adrian Stoica
In the new political situation in Europe, where the identification of suitable sources for providing the necessary natural gas supplies able to avoid Russia has become a zero degree priority, the introduction of liquefied natural gas (LNG) in the energy circuit represents a good opportunity. Sure, we cannot speak about a variant with the possibility of immediate effect, but it is a viable one, not to be neglected on medium and long term.
If we talk about Romania, besides providing an important resource by using liquefied natural gas, our country could become in the future an important transit hub for Europe. On the old continent, this option is already taken into account and, moreover, the first plans have been drawn up. Thus, the Constanta Port may have, in the future, a liquefied natural gas terminal, the project being part of a master plan at European level. The future terminal is part of the European strategy for the funding of LNG master plan – on the Rhine-Main-Danube axis. The project is developed by a consortium consisting of 33 participants, the coordinator being the Rotterdam Port Administration for Rhine-Main and Pro Danube International, Austria, for the Danube area.
The first phase is the start of a feasibility study and an overall technical project for the construction of an LNG terminal in Constanta Port. According to the initiators, an important chapter in drawing the feasibility study is the carrying out of an analysis on the possibilities of supply and estimating the demand for LNG related to this terminal. If there are enough customers willing to give up the classic fuel, the construction of a liquefied natural gas terminal in the Port of Constanta, particularly important transport hub for South Eastern Europe, will be justified. Under this new European plan, the liquefied natural gas would reach across Europe through a system of terminals located on the Danube.
Also, to reduce the emissions, the gas can be used as fuel for ships, because emissions will be almost 30 percent lower than the ones from the ships running on classic fuel. In addition, the costs would be considerably lower, since the LNG price is half the cost of diesel fuel and 20 percent lower than that of black oil. “Liquefied natural gas has great potential to become an important fuel. The price difference will be of at least 15-20 percent as compared with black oil,” said recently project coordinator Manfred Seitz. The future terminal is designed for a capacity of 5,000 cubic meters and, if all things go well, it should be completed in 2017 - 2018, the investment being financed with EU funds. After the port of Constanţa, the next important junction on the future of European LNG route is the Bulgarian port of Ruse, where there is already under construction a LNG terminal of 1,000 cubic meters.
Another option for Romania is the AGRI project, 2015 could be decisive in regard of its future. The shareholders of natural gas producer Romgaz have approved in late January, at the shareholders meeting, the increase of the share capital of AGRI LNG Project Company Ltd. (responsible for the development of the namesake project for liquefied natural gas transport from the Caspian region to Europe) by EUR 80,000 and Romgaz’s participation with EUR 20,000 to this share capital increase.
The feasibility study has been completed and, in the next period, most likely in February, is expected a decision on the next steps to be taken. In Georgia, the gas will be liquefied and transported to the Black Sea on specialized ships. The re-gasification process will take place at Constanta.
Starting with Romania, the project would supply Hungary too. SC AGRI LNG Project Company SRL was set up in February 2011 and is associated with SOCAR (Azerbaijan), Oil and Gas Corporation (Georgia), MVM (Hungary) and Romgaz. The Romanian project to build a liquefied natural gas terminal in Constanta was declared as eligible by the European Commission for funding with European funds in 2013, as part of the gas interconnector on Azerbaijan-Georgia-Romania Interconnector (AGRI), in which is also included the Constanta-Arad-Csanadpalota (Hungary) gas pipeline project. The project’s cost is estimated to EUR 1.2 - 4.5 billion, depending on the capacity of terminals, which would range between 2 to 8 billion cubic meters annually.