EC to explore LNG; AGRI is in priority projects list

Oil&Gas Materials 20 May 2015 15:52 (UTC +04:00)
The European Commission will have a closer look at the LNG projects in the context of the EU’s diversification strategy, and the AGRI is in its PCIs list.
EC to explore LNG; AGRI is in priority projects list

Baku, Azerbaijan, May 20

By Aygun Badalova - Trend:

The European Commission will have a closer look at the LNG projects in the context of the EU's diversification strategy, and the AGRI (Azerbaijan-Georgia-Romania Interconnector) is in its Project of Common Interest (PCIs) list, the Commission told Trend in May 20.

AGRI is expected to transport liquefied Azeri gas from Georgia, across the Black Sea, to a LNG terminal to be built on the Romanian Black Sea Coast. From that point, the gas will be pumped through Romanian natural gas transmission system to Hungary, through the Interconnector between Romania and Hungary ( Arad - Szeghed ) to be transported further to the European market.

"The upgrade and extension of the AGRI pipeline between Constanta, Arad (Romania) and Csanádpalota (Hungary), with sections both onshore and offshore is on the list," the source in the Commission said.

The cost of the project will vary from 1.2 billion euros to 4.5 billion euros, according to the preliminary estimations. The project's cost will depend on the capacity of terminals that can be equal to 2-8 billion cubic meters of gas per year.

The Commission said that it will explore the full potential of LNG, including as a back-up in crisis situations when insufficient gas is coming into Europe through the existing pipeline system.

The Commission stressed that increases in LNG trade will help to bring world natural gas prices closer together.

"The LNG prices, over recent years, have been higher compared to pipeline gas due in particular to high liquefaction, re-gasification and transportation costs and demand in Asia," the Commission said.

In order to address these issues, the Commission will prepare a comprehensive LNG strategy, which will also look into the necessary transport infrastructure linking LNG access points with the internal market. The potential of gas storage in Europe and the regulatory framework needed to ensure sufficient gas in storage for winter will also be addressed in this context.

The Commission said it will also work to remove obstacles to LNG imports from the US and other LNG producers.

European countries are too dependent on fuel and gas imports. Among the most important energy objectives of the European Union is the diversification of its energy supply sources and routes.

The European Commission approved the list of "Projects of Common Interest" in October 2013. It included 250 key energy infrastructure projects, including LNG projects.

The participants of the AGRI project are the State Oil Company of Azerbaijan (SOCAR), Georgia's Oil and Gas Corporation, as well as MVM (Hungary) and Romgaz (Romania) companies.

The sides established SC AGRI LNG Project Company SRL joint venture in February 2011 for the implementation of the project.

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