At first sight, almost all members of the European Union want to get rid of their dependence on natural gas from the Russian Federation. But only „at first sight”! At a closer „view”, only Romania and Transgaz seem to „fight” for this independence! And Brussels does nothing more to prevent the perpetuation of the state of dependence, practiced by Moscow, but, this time, a little more subtle!
Over the years, gas has become the pride of „Mother Russia”, and Gazprom has become the most important internal propaganda tool of „Tsar Putin”. The huge gas concern, carefully built by the former „master”, Viktor Chernomyrdin (former minister of Gas during the USSR, former prime minister of Russia until 1998, but, above all, founder and president of Gazprom), was „captured”, piece by piece, by the current „master”, Vladimir Putin. And Russia’s budget is based on oil and gas exports. That is why, obviously, the Kremlin will not give up this huge source of money, prestige and power!
It should be noted that in 2019, pre-pandemic year, Russia exported almost 200 billion cubic meters (bmc) of gas to Europe. In 2022, when it attacked Ukraine and the European Union began to apply sanctions, Russian gas exports to the EU barely exceeded 60 bmc. In fact, we are talking only about direct exports, mainly through pipelines that leave Siberia, cross Ukraine and reach Europe.
According to the website of the Council of Europe (https://www.consilium.europa.eu/ro/infographics/eu-gas-supply/#0), the share of Russian pipeline gas in EU imports decreased from over 40% in 2021, to around 8% in 2023. In terms of pipeline gas and liquefied natural gas (LNG) combined, Russia accounted for less than 15% of total EU gas imports, i.e. 43 bcm.
In 2022, the 27 countries of the European Union consumed more than 350 billion cubic meters of gas – 13% less than in 2021, according to the EU’s strategy to reduce gas consumption, mainly as a sanction against Russia, but also as a method to reduce greenhouse gas emissions. In 2023, the EU imported more than 120 bcm of LNG. Thus, imports from the US increased from 18.9 bmc in 2021 to 56.2 bmc in 2023. Imports from Norway increased from 79.5 bmc in 2021 to 87.7 bmc in 2023. Imports from other partners increased from 41.6 bmc in 2021 to 62 bmc in 2023.
All these data on Russian gases refer only to those „labeled” „made in Russia”! Because Russian gas enters Europe via alternative routes and „labeled” under various formulas.
A Romanian initiative, „torpedoed” by Moscow
The general director of Transgaz, Ion Sterian, launched, developed and promoted the initiative of the Vertical Corridor (VGC) for the transport of gas from the south of Europe to the north, since 2016. Meanwhile, the idea was embraced by the European Union, Ukraine, the Republic of Moldova, and also by the US.
VGC aims to diversify sources of natural gas, emphasizing non-Russian ones, the supply made from the Southern Corridor, primarily through the LNG regasification terminals in Greece, but also in Turkey, and then, through pipelines, in Bulgaria, Romania, Slovakia, Hungary, Moldova, Ukraine, etc. The same route, via the TANAP and TAP pipelines, would also have gas from the Caspian area (primarily from Azerbaijan).
But Moscow is „not sitting still” and seems to be working on ways to turn the VGC to its own advantage. The strategy of the Kremlin and its „local representatives” consists of two steps: step 1 – the use of the EU’s VGC to ensure an expansion of gas transport networks from the Southern Gas Corridor to Ukraine, Slovakia, Romania, Hungary, Austria, etc. – politically and financially supported by US and EU money; step 2 – presentation of „market realities”, i.e. the availability of huge quantities of cheap gas from Turkey, which will make LNG absolutely unfeasible!
And the gas in Turkey is cheap for one reason: it is Russian, and the Russians sell it at dumping prices! Because Turkish Stream, the gas pipeline that brings Russian gas to Turkey via the Black Sea, is full of gas!
In fact, for several years, Ankara still wants to establish the Turkish Gas Hub (TGH). It looks like a well-laid plan by Russian President Vladimir Putin to use gas flows from Russian pipelines in Turkey to create his own benchmark in the gas market, in opposition to Western European trading and, in particular, with the Dutch benchmark TTF.
Usually, on the Turkish Gas Hub, the price is 4-5 euros/MWh lower than the TTF. But a new gas exchange appears in Bulgaria, where the prices are even lower than those in Turkey: 6-7 euros/MWh below the TTF.
Why would Putin „torpedo” his own strategy related to the Turkish stock market? He doesn’t torpedo anything! He is simply testing the patience of Brussels, testing how far he can go without provoking a response from the EU. In addition, Bulgaria is the logical place to conduct this test: it offers access to an integrated EU market, with no export and transit restrictions. It should be noted that LNG is currently hardly involved in Bulgaria’s gas balance.
Romania ”attacks” Gazprom
Conspiracy theories are not necessarily fanciful! Romania is in a privileged position: it has gas, and with the production from Neptun Deep, it will become the largest producer of natural gas in the EU. If we add the gas from Caragele Deep, the domestic production will far exceed the domestic consumption capacity. And thus there is the possibility to export a large part of the gas. Which means that Romania ”attacks” directly Gazprom and, consequently, ”attacks” directly the Kremlin! Because, effectively, „we are taking money out of the Russians’ pockets”!
And the consequences are not long in coming: Transgaz and its general director are „spotted” in the press! Maybe not in bad faith! The manipulation to which journalists are subjected is not at all negligible!
However, we can’t help but wonder why now! Recently, Transgaz started the construction of the Tuzla – Podișor pipeline, through which gas from the Black Sea will be able to enter in the national transport system. This will be ready before Petrom and Romgaz start extraction from the Neptun Deep field. The project is particularly important not only for off-shore gas from the Black Sea, but also from the perspective of the energy security of Romania and the entire region, considering that it will also be supplied with gas from the Caspian area, as well as with LNG arriving at the Turkish and Greek harbors. At Podisor, the new pipeline will join the BRUA gas pipeline, through which gas can be exported to Hungary, Austria and beyond.
Basically, it is the alternative to Russian gas and the projects through which it reaches Europe! Which, obviously, cannot be to Moscow’s liking! And, hence, the attacks against Transgaz and its management! Ruin the plans of the Kremlin!
On the other hand, the European Commission should also „wake up” and do its job, not let the Russians mess around! They must investigate the sale of gas by Moscow at dumping prices, as well as the illicit practices, through which Russian gas is „sneaked” into the EU, under the sui-generis name of „Turkish mix”! So it should eliminate the non-market advantages of Russian gas coming through Turkey, using a combination of sanctions policy tools and competition decisions. All this if the EU member countries really want a real independence from Russian hydrocarbons and not a pseudo-independence, as at present!
So, for now, we can only say that „Brussels is not too cool either”! Doesn’t really take a stand against Moscow and Russian gas at all!
