RomGaz, Romania’s natural gas provider, has signed an agreement with Socar, Azerbaijan’s National Oil Company, for the latter to provide natural gas to the country amidst a growing energy crisis that has left Romanians facing ever-increasing energy bills. The two companies signed the agreement on Friday, December 17, whereby Socar will provide natural gas to Romania.
The contract will begin on 1 January 2023, with Azerbaijan providing gas through the Southern Gas Corridor, using the Trans Adriatic Pipeline (TAP), which connects with the Trans Anatolian Pipeline (TANP) at the Greek-Turkish border, transporting natural gas to Europe from the Shah Deniz II field in Azerbaijan, as well as the new Gas Interconnector Greece-Bulgaria (IGB), a 182km-long trans-border natural gas pipeline to transport gas from Greece to Bulgaria, along with the national transport systems of Bulgaria and Romania. The contract is for an indefinite period.
The new agreement resulted from negotiations earlier this year that led to a memorandum of understanding in June. The contract is intended to help Romania cover its needs for imported natural gas, in accordance with the national strategic objectives of securing an adequate supply of natural gas while diversifying sources. A joint press release by RomGaz and Socar states, “the parties intend to continue their collaboration and perfect the mechanisms to deliver natural gas to the Romanian market.”
The agreement with Romania follows a memorandum of understanding Baku concluded with the European Union in July to increase exports of natural gas from 10 to 12 billion cubic meters. That increase is meant to help Brussels offset the loss of Russian gas supplies, which Moscow cut off in retaliation for EU sanctions imposed following the invasion of Ukraine in February.
But many ask if the EU and the Romanian Government are merely engaged in a shell game. Azerbaijan does not have the capacity to meet this increased demand. As a result, on November 18, Gazprom, Russia’s state gas producer and exporter, announced that it would supply one billion cubic meters of natural gas to Azerbaijan through March 2023. This agreement suggests that Baku intends to use Russian gas to supply its domestic market in order to free up gas and enable it to meet its commitment to Brussels. The sanctions imposed on Russia by the European Union do not apply to Azerbaijan, so the country is free to import as much Russian gas as it wants without facing repercussions. As a result, these new agreements seem to contravene the European Union’s and Romania’s political intentions to reduce their dependence on Russian gas.
As the increased imports from Azerbaijan are being facilitated with help from Moscow, it suggests that the efforts of both Bucharest and Brussels at diversification may be in vain. Socar issued a statement to the Azerbaijani news agency APA, stating that it has long-standing cooperation with Gazprom and that the two companies “are trying to optimize their infrastructure by organizing the mutual exchange of gas flows.”
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