Azerbaijan to supply 300 million cubic metres gas to Romania in Jan-Apr 2023

Azerbaijan will supply 300 million cubic metres gas to Romania in Jan-Apr 2023.

Romanian gas producer Romgaz has signed a supply contract with Azerbaijan’s state oil and gas company SOCAR for the delivery of spot volumes over the winter months, Report informs via Independent Chemical and Energy Market Intelligence (ICIS).

The buyer may secure up to 300 million cubic metres (mcm) between 1 January-1 April 2023, with daily deliveries of up to 4.2mcm, according to sources close to discussion.

The volumes are indexed to ICIS day-ahead and weekend TTF price assessments and will be delivered from Türkiye to the Greek virtual trading point (VTP). It will be shipped further to Bulgaria via Interconnector Greece-Bulgaria (IGB) and reversed into Romania at the Negru Voda 1-Kardam interconnection point on the Trans-Balkan corridor.

A source said daily volumes may vary and will give Romgaz the possibility to nominate depending on needs.

Meanwhile, Romania has signed a memorandum of understanding with Azerbaijan, Georgia and Hungary for building a 1,100km subsea cable for electricity imports, according to a European Commission statement.

A feasibility study on the project is “currently ongoing”, said the commission’s president Ursula von der Leyen.

But traders active in Romania described the noted the project was highly expensive and unnecessary.

“First, they [Romania] need to finish domestic projects. How can they invest in a such an expensive cable if they can’t even finish local power plants?” a trader said.

To recap, the Greece-Bulgaria (IGB) gas pipeline was put into commercial operation in early October. IGB provides for the transportation to Bulgaria of "blue fuel" produced within the II stage of operation of the Shah Deniz gas condensate field in the Azerbaijani sector of the Caspian Sea. The state company Bulgargaz EAD signed a contract with the Shah Deniz consortium for the supply of 1 billion cubic meters of gas from the Shah Deniz-2 field. Azerbaijani natural gas will be able to satisfy 25-30 per cent of Bulgaria's needs.

150 kilometers of the pipeline with a total length of 182 kilometers run through the territory of Bulgaria. The annual capacity of the pipeline is expected to be 3-5 billion cubic meters.