Romanian President Asks Parliament To Reject Law Banning Natural Gas Exports

Basescu argues that this regulation would impede the market's liberalization, which is a major step to fostering competition on the European Union common market. The president also points to a request for further information from the European Commission regarding a joint order of the Minister of Economy, Energy Regulations Authority and Mineral Resources Agency, of 2006, concerning the use of natural gas on the internal market and steps to increase discipline in the natural gas sector, sent to Romanian authorities on April 6, 2011.

"The request for information reflects the European Commission's suspicions about an effect similar to quantity restrictions for exports of natural gas, created by the order in the question," says the president in a message to the Parliament, adding that one consequence of this process might be an infringement procedure against Romania.

On December 15, the Chamber of Deputies adopted the amendment to the gas law, whereby Romanian companies are prohibited from exporting natural gas until alternative import sources are found. The amendment aims to "ensure gas supply security by using domestic natural gas production."

Current infrastructure does not allow Romania to export gas. Although Romania has a pipeline connection with Hungary, the pipe can only be used for imports at the moment.

Romania imports natural gas mainly from Russia, through intermediaries, but also from Hungary, which provides minute volumes compared to consumption.

The only way for Romania to diversify its gas imports would involve the completion of the Nabucco pipeline and AGRI gas route. None of these two projects is currently running, and their completion will not be achievable for several years.

The largest local gas producers are OMV Petrom (SNP.RO) and Romgaz Medias.

Petrom recently announced it would start exporting gas unless the local market is deregulated. The International Monetary Fund asked local authorities to liberalize electricity and gas prices by 2013 for companies and between 2013 and 2015 for households.

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