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Romania reveals possible financing sources for AGRI project

August 13, 2018/ 08:37

Baku. Azerbaijan-Georgia-Romania Interconnector (AGRI) remains an important project for Romania and for the European Union (EU), a source in Romanian government told Trend.

"The AGRI project is a unique initiative in the Black Sea region, covering both the energy security component (by diversifying the energy routes and sources) and the regional cooperation component, which is a major common goal of the Energy Union. For these reasons AGRI remains an important project for Romania and for the European Union (EU). On a wider note, AGRI highlights the important contribution that liquefied natural gas (LNG) could bring to the EU’s energy security, in line with the objectives of the European Commission Strategy for LNG and natural gas deposits", said the source.

The source pointed out that AGRI aims at opening a new gas transport corridor from the Caspian region, especially from Azerbaijan, as a new entry point for imported gas to the EU market, inform Trend.

"The corridor was specially designed as the shortest, most direct and independent gas transport route connecting the gas source to the EU gas market. The discovery in the Black Sea of important hydrocarbon reserves may confer an additional significance to the project. Furthermore, AGRI may be considered as additional supply route for the BRUA (Bulgaria-Romania-Hungary-Austria) interconnector currently under execution".

The AGRI Feasibility Study has already been finalized, with positive conclusion in both scenarios considered (in terms of projected delivery capacity), the source said.

Further steps towards the development are assessed in view of the progress of other regional energy projects, as well as of the availability of Caspian gas resources, added the source.

As far as the financing options are concerned, the source noted that these might include special EU financing programs for energy - such as Common Interest Projects (CIP), Energy Community Common Interests Projects (ECCIP) and Mutual Interest Projects (MIP) – and/or the banks specialized in financing energy/infrastructure projects.

"Over the past years there has been an increase in the EU demand for natural gas, a trend that is expected to continue in the future. At the same time, the EU pays special attention to the need to diversify the energy routes and sources and to identify sustainable alternatives in these respects. The development of LNG sector in Central Europe will continue to play an important role in lowering the EU dependency on gas imports from traditional sources", noted the source.

Moreover, the Romanian government source pointed out that the ongoing strengthening and expansion of trans-European energy infrastructure opens new opportunities both for the buyers as well as for the producers of LNG. "Owing to the efforts made so far, the Central and Eastern Europe region is becoming more connected to new international gas sources and transportation corridors, and the LNG terminals already prove themselves to be viable supply options".

AGRI project envisages transportation of Azerbaijani gas to the Black Sea coast of Georgia via gas pipelines. Azerbaijani gas delivered to Georgia's Black Sea coast will be liquefied at a special terminal and following this, it will be delivered in tankers to a terminal at the Romanian port of Constanta.

Further, it will be brought to the gaseous state and sent via Romanian gas infrastructure for meeting the demands of Romania and other European countries.

The project is the first of its kind to be developed in the Black Sea, aiming the transport of natural gas from Caspian region to Europe. In 2017, the cost of the project was estimated to be between 1.2 billion euros to 4.5 billion euros.

The participants of the AGRI project are SOCAR, Georgia's Oil and Gas Corporation, as well as MVM (Hungary) and Romgaz (Romania). The parties established the SC AGRI LNG Project Company SRL in February 2011 for the implementation of the project.

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