Romania pressed by Hungary to improve gas transport infrastructure

03 August 2018, Week 30, Issue 461

Romania is under pressure from neighbouring Hungary to proceed with the construction of its section of the Bulgaria-Romania-Hungary-Austria (BRUA) pipeline.

Budapest has been lobbying Bucharest on the issue even though Hungary has itself stopped work on its section of the pipeline that runs to Austria. Budapest argues that an existing gas pipeline to Slovakia would be sufficient to transport Romanian gas to the Central European Hub at Baumgarten. 

There have been questions in the past about the commitment of Romania and Hungary to the project despite BRUA having received large amounts of financing from European institutions. 

BRUA and the EastRing gas pipeline project, which will transport gas through Bulgaria, Romania, Slovenia and Poland, are designed to boost energy interconnectivity amongst the eastern members of the EU and thus reduce their dependence on Russian gas imports. 

Hungarian officials have this summer pressed Romania to take legislative steps that would speed up work on the pipeline and to pass legislation regulating offshore development in the Black Sea. 

BRUA is meant to transport 4.4 bcm per year of gas into Hungary from ExxonMobil’s offshore Black Sea Neptun Deep field. That entire production volume has been contracted until 2037 by two Hungarian firms that intend to distribute the gas in Hungary and to Ukraine, Serbia and Croatia instead of sending the gas directly on to Austria in line with BRUA plans. 

In 2017, Hungary decided to forego construction of its section of BRUA, arguing that it would save the project 1 billion euros (US$1.2 billion) and that the gas could reach Austria via Slovakia. The move is seen by some as an attempt by Budapest to boost its own role as a distribution hub in Central Europe. But others say the prospect of Romanian gas flowing into Hungary gives Budapest an opportunity to gain financially, and that it would mark the first time the country would not be dependent on Russia for gas. 

Responding to Hungary’s accusations of foot-dragging on the project, Romania replied that Budapest was not adhering to its side of the BRUA agreement by cancelling construction of its section of the pipeline. The European Commission’s Vice President for Energy Union, Maros Sefcovic, himself a Slovak, has urged the two countries to stop their bickering and to engage in negotiations. 

Romania’s deputy premier, Viorel Stefan, told the Romanian News Agency in early July that BRUA was underway in his country and was on schedule. "The works have started at the beginning of [July]. Open dialogue between all interested parties is essential and Romania supports such an approach," he said. 

The US has also urged Romania to move forward with BRUA and a legal framework for offshore Black Sea exploitation. 

Edited by

Ryan Stevenson

Managing Editor

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