Caspian, Middle East and Egypt will play significant role in diversifying energy supplies to Europe: Interview with the Minister of Economy of Romania

Azerbaijan, Baku, July 3 / Trend , A.Badalova /

Trend interview with Minister of Economy of Romania Adrian Vidyanu, who was on visit to Baku this week to participate in the Azerbaijani-Romanian inter-governmental commission on economic cooperation.

Trend : What is the current stage of the economic bilateral relations of the two countries and which are the areas that have the highest potential in terms of cooperation enlargement?

Adrian Vidyanu: The bilateral trades between Romania and Azerbaijan reached at the end of 2008 the amount of 160.4 million USD, the highest since 2000, and it is 89% due to the Romanian imports from Azerbaijan (142.9 million USD). The imports cover 99.7% the acquisition of oil and oil products. Romanian exports stood in the end of 2008 at 17.5 million USD, with the furniture, metals and metal items, chemical industry products, wood and wooden items, installations and equipments being the main exported products.

There are currently Romanian-Azeri 23 joint ventures in Romania, with an invested capital of

736.5 thousand USD.

The areas having a real development potential in terms of Romanian-Azeri bilateral relations are the energy sector, the oil extracting and processing industry, the chemical and petrochemical sector, the wood processing-furniture sector.

Q: What role do you pin to the issues of diversification of European energy supply routes? What is the importance of Azerbaijan in terms of providing energy security for Europe?

As an EU member, Romania has to be a supplier of energy security and, through its own policies and programs, it should actively contribute to supporting and accomplishing the Union goals.

One priority objective of the European energy policy is represented by the strengthening of the security of energy supply, in the context of the constant growing dependency of the EU member states on the fossil fuel imports.

New European Energy Policy includes a series of guidelines to be implemented in order to strength the security of supply in the European Union, in the context of national markets liberalization and the internal energy market formation.

Diversification of both energy transport routes and sources represent one of the key issues of the European energy policy.

On the other hand, the events taking place at the debut of this year have put forward once again the EU need to develop an energy infrastructure and to strengthen the direct link between the external and internal EU energy policy.

According to the various forecasts for the future European gas supply, as indigenous production all over Europe is decreasing very dramatically, new infrastructure sources have to be established with the European gas markets to meet the expected future gas demand.

In this respect the Caspian Region, the Middle East as well as Egypt with their biggest gas reserves worldwide will play a crucial role in terms of diversification of supply as well as security of supply for Europe. The opening up of a fourth main supply corridor is the only solution to meet all future gas demands in Europe. Consequently this route offers a wide range of supply sources for Nabucco gas pipeline, including Azerbaijan.

Since becoming independent in 1991, Azerbaijan has attracted significant international interest in its oil and natural gas reserves. Foreign investors are helping the country to develop its rich oil and natural gas reserves in the Caspian Sea basin.

With the discovery of the Shah Deniz field in 1999, Azerbaijan's natural gas production potential expanded dramatically, setting the stage for the country to become a major net exporter of natural gas over the course of the next decade. International interest in Azerbaijan's natural gas sector has increased sharply due to Shah Deniz

Azerbaijan's major natural gas production increases in the future are expected to come from the development of the Shah Deniz offshore natural gas and condensate field. Industry analysts estimate that Shah Deniz is one of the world's largest natural gas field discoveries of the last 20 years. With the addition of the Shah Deniz natural gas and condensate field Azerbaijan can become a large natural gas provider to Europe in the upcoming decade.

It is appropiate to remind that on 12.03.2008 was signed, in Bucharest, a Collaboration Agreement between the Ministry of Economy of Romania and the Ministry of Industry and Energy of the Republic of Azerbaijan, which provides development and deepening cooperation in the fields of extracting oil and gas, power, energy conservation, use of renewable energy, development of transport corridors and power line communications in appropriate industrial areas.

In the tournaments conducted by the Ministry of Economy officials in Caspian Region it was proposed to the Azeri representatives to explore opportunities for cooperation in the Nabucco Project and we are glad that Azeri representatives received with interest this proposal.

Q: What is the importance of Nabucco gas pipeline project for your country? How do you estimate the chances of it's realization?

A: Gas represents a promising and contemporary primary energy source positively impacting the environment and generating a genuine interest. The current energy demand of various economies is the key initiative for new investments in the gas sector presently focusing on gas transmission to markets in demand of such commodity.

The highly industrial European energy demand is gradually increasing and the lack of an additional primary energy source shall cause a steady growth of the gas demand in the near future. Moreover, the diversification of the supply sources meant to cover the growing energy demand constitutes a sensitive aspect of the European energy policies.

Therefore, the Nabucco Project was meant to connect and capitalize the promising gas reserves of the Caspian Region and Middle East to the European markets.

Around Europe, there are sufficient sources to cover the estimated increase in gas demand for the following decades, but at the moment there are not enough opportunities for such gas volume transmission to European gas markets.

As there are no delivery corridors between the intended gas sources and the target consumption areas, Nabucco may provide a gas source to the European market, thus playing an important role in the increase of European gas market competitiveness.

The Nabucco project will also provide a higher security in gas supply for Europe, diversification of sources, access to Caspian Sea and Middle East gas reserves for the European markets.

The importance of the Nabucco has been recognized by the European Commission, by including this project in the TEN Program (Trans European Networks), in the list of priority projects and financing 50% of the feasibility study costs.

For Romania, this project means stimulating the competition on the domestic market, strengthening the role of a country transited by major energy transportation corridors, development of connected industries which involve Romanian companies, creating new jobs.

Romania attaches great importance to the development of the projects ensuring the diversification of oil and gas supply. With regards to Nabucco, we appreciate that the signing of the Intergovernmental Agreement between the state partners by the end of July will ensure the necessary framework for the future development of the project.

Europe has agreed a forward-looking political agenda to achieve its core energy objectives of sustainability, competitiveness and security of supply.

The need of infrastructure development for the EU's energy needs and encouraging diversity of both energy sources and supply routes are also underlined by the EU Energy Council Conclusions regarding the European Commission's Communication "Second Strategic Energy Review - an EU energy security and solidarity action plan", adopted by the EU energy ministers on February, 19th, 2009.

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