Romania ramps up gas imports as Russian flows to SEE rise

LONDON (ICIS)–Romanian gas imports via the Trans-Balkan pipeline have been soaring to the highest levels so far this year as companies are scrambling to fill up storage facilities.

Inflows via the Negru Voda 1 border point with Bulgaria have doubled since the beginning of July, rising to 83GWh/day (7.8 million cubic meters/day) on 11 July, the latest available data according to Romanian gas transmission system operator Transgaz showed.

The imports may include a combination of Russian-sourced gas and regasified volumes imported as LNG via the Greek terminal Revithousa and transiting Bulgaria.

Interestingly, the imports may be higher than the actual physical volumes would suggest since quantities may be netted out at the border against exports from the Romanian virtual trading point to Bulgaria. The regulator ANRE lifted a ban on exports from the Romanian VTP to Bulgaria via the first line of the Trans-Balkan corridor (T1) at the end of June.

For example, capacity booking data for 11 July indicate that 8.5MWh/day of bundled firm daily capacity was booked for exports from the Romanian VTP to Bulgaria via the Negru Voda 1 border point.

RISE IN RUSSIAN OUTFLOWS

The rise in Romanian imports through T1 coincides with increasing Russian gas exports via the TurkStream2 pipeline since the end of its planned maintenance on 27 June.

Outflows on the Turkish-Bulgarian Strandzha 2 border have been building up throughout this month and reached 471GWh/day on 12 July, the second highest level so far this year.

However, in contrast to Romania, where imports have been soaring, Russian exports transiting Bulgaria to other neighbouring countries have been stable.

For example, gas exports reaching the west Balkans and Hungary via the Bulgarian-Serbian border have been stable at 241GWh/day throughout July, according to ENTSOG data.

UNUSUAL IMPORTS

The rise in Romanian gas imports is unusual on several accounts.

Firstly, the country typically only imports Russian gas during winter when its own production is insufficient to cover peak demand.

Secondly, even if the imports are not entirely of Russian origin and include volumes imported as LNG via Greece, this may indicate the country is now diversifying its portfolio, becoming an important regional LNG buyer along with neighbouring Bulgaria.

Data published by the Greek gas transmission system operator DESFA indicate there has been an uptick in physical exports via the Sidirokastro Greek-Bulgarian border point, hovering around 140GWh/day on 12 July, 40GWh/day higher than at the start of the month.

ICIS LNG Edge data also show a high number of vessel unloadings at the Greek Revithousa LNG terminal, which has so far received four cargoes and is expecting at least another two until the end of the month. This compares to only two arrivals in July 2021.

Thirdly, it indicates that the country, the third largest producer of gas in Europe, is struggling with decreasing internal production, which cannot meet summer demand.

Finally, it may also point to the fact that Romania is also transiting Russian gas as exports to Hungary via the Csanadpalota border point, which have also been picking up, rising about 26% to 49GWh/day since the end of the TurkStream2 outage last month.

STORAGE CHALLENGES

Storage injections, however, are likely to be the most important driver because facilities are only 47% full, some 13 percentage points lower than the European average and much lower than the 80% fullness levels mandated by the EU for member states by 1 November 2022.

The need to replenish storage facilities may also explain the burst in liquidity on the local gas exchange BRM, where as much as 74GWh/day were traded on the spot on 12 July, more than double the average of volumes traded on the spot last month.

Storage levels in neighbouring Bulgaria, are even lower at 37.87%, which means the country itself may be looking to secure more volumes regionally, including from Romania.

Russia suspended exports to Bulgaria at the end of April, which means the country relies on Greece for imports but may also be looking to import from Romania after the country lifted a ban on exports. The ban on exports to Ukraine via the first line of the Trans-Balkan route remains in place.