ROMANIAN PRESIDENT CONCERNED BY EUROPEAN DEPENDENCE ON RUSSIAN ENERGY

Interviewed in the current issue of the weekly Moskovskie Novosti (November 17), Romanian President Traian Basescu follows up on his remarks at a Jamestown Foundation conference in Washington (see Jamestown press release, August 3), calling for a Caspian-Black Sea-focused European energy supply strategy. No European head of state has yet addressed this issue publicly in such forthright terms.

Asked by MN’s interviewers to elaborate on his speech to an [unnamed] “energy conference in Washington,” Basescu describes Gazprom as an “unreliable supplier” in view of its track record in Ukraine and other countries and generating “mistrust” by its non-transparent price-setting policies. He expresses concern over Gazprom’s intentions to “take under its control” the gas reserves of the producer countries Turkmenistan, Uzbekistan, and Kazakhstan as well as the pipeline systems of the transit countries Ukraine and Belarus. All this shows that Gazprom “aims to reduce Europe’s supply diversification chances to a minimum.”

Citing the arbitrariness of Gazprom’s prices, ranging from $110 to $260 per 1,000 cubic meters of gas, Basescu observes that most of its pricing decisions are politically motivated and made possible by monopolization of markets and, increasingly, of transport. He urges Europe therefore to make arrangements with competing suppliers as the “number one priority,” the only way to ensure that prices are “market-based and nondiscriminatory [and that] Europe does not face the danger of interruptions or cuts in deliveries.”

While Romania and all Europe “need pragmatic, good-neighborly relations with Russia, it is very difficult to envisage such relations in the absence of agreed standards of cooperation.” Curtly and without naming names, Basescu dismisses the Kremlin-propagated notion of mutual dependence between Russia as supplier and Europe as consumer: “One can’t overlook the fact that Gazprom is preparing to supply both Europe and China. Obviously, however, it will never be able to meet the needs of both at the same time. One cannot rule out that situations [may arise] in which Gazprom tells us: ‘Unless you are obedient, I will sell the gas to China’.”

Basescu had first aired these and related concerns at the Jamestown conference during his official visit to the United States. There, he warned that Europe generally is becoming “heavily dependent on energy supplied by Russia” and vulnerable to the “political consequences associated with energy dependence. Building oil and gas pipelines without trying to find other [than Russian] sources would be a huge mistake. This is why the Caspian region has emerged as a real solution.”

Terming Gazprom “more efficient than the Red Army used to be” as a strategic tool in Europe, Basescu called in urgent terms for competitive arrangements to avert “Gazprom’s monopoly in Europe, which seems to be an increasingly large risk. …We are at a crucial time when democratic nations have to make a courageous decision” (www.jamestown.org/docs/BasescuSpeech.pdf).

Romania has initiated two projects for the transit of Caspian energy via the Black Sea region to Europe.

The proposed Constanta-Trieste oil pipeline is a five-country, Romanian government-initiated project for transporting oil from Kazakhstan to European consumer markets. It envisages construction of a 1,360-kilometer pipeline from the Black Sea port of Constanta, passing along easy terrain through the territories of Romania, Serbia, Croatia, and Slovenia and terminating at Trieste in Italy. This is the most direct transit route from the Caspian basin via the Black Sea to Europe.

The line’s proposed capacity is 40 million tons annually, at an estimated construction cost of $2.27 billion. The countries have formed an Interstate Committee at the deputy-minister level to promote this project. In addition, the project envisages expanding Constanta’s oil-handling maritime terminal far beyond its already impressive annual capacity of 21 million tons. This project must involve routing part of Kazakhstan’s growing export volumes to Georgia’s Black Sea ports, expanding the existing Georgian terminals as well as building new terminal capacities, which could then link up with the proposed Constanta-Trieste pipeline. Romania recently proposed that Kazakhstan should participate in the Constanta-Trieste project as the supplier country (see EDM, August 3).

Romania also proposes placing a liquefied natural gas terminal at Constanta, and it is discussing this project with the authorities of Qatar. The latter envisage becoming a part of the gas supply system of Europe. Constanta has a competitive advantage over other Black Sea ports in that it can accommodate supertankers of 150,000-ton capacity. A terminal in Constanta could, in turn, provide an alternative supply source for Ukraine, a country that is currently “captive to Russian supplies,” in Basescu’s words.

In addition, Romania strongly supports the Nabucco gas pipeline project to bring Caspian and possibly Iranian gas to Europe via Turkey, Bulgaria, Romania, Hungary, and Austria. The European Union has endorsed Nabucco as a priority project (see EDM, June 30, July 3). The Qatar LNG proposal and Constanta-Trieste project await EU attention, in line with the EU’s supply diversification goals. Romania will significantly contribute to EU decisions on energy policy as a new member country from January 1.