Expanding its power base
Gaz de France is moving into power generation and supply, as the French group’s business development director for Romania, Tanguy Moulin Fournier, discusses the local options for energy creation
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Gaz de France is poised to enter the power generation and supply sectors. Now the company, which owns the Romanian gas distributor Distrigaz Sud, has the approval from the country’s energy regulators to supply electricity, which it intends to begin by the end of 2008.
The question remains as to how it will produce electricity, with the options including thermo, hydro, wind and nuclear power.
“Gaz de France wants to have a balanced electricity production in the local market,” the business development director for Romania, Tanguy Moulin Fournier, tells The Diplomat.
The French company is interested in buying hydro power plants from the state company Hidroelectrica and is looking for stations with an installed power capacity of more than ten MW.
So far the French giant has not participated in recent public auctions organised by Hidroelectrica for 150 micro-hydro power stations, due to the low capacity of these plants. “For smaller companies acquiring stations which can only produce one MW for example, this may be reasonable, but not for us,” says Fournier.
Gaz de France is prospecting the market in wind energy, where Romania has only seven MW of installed power so far. “Romania has a great potential to develop here, but no solid projects have been developed yet,” says Fournier.
Due to the merger this summer with energy company Suez, which owns Belgian power group Electrabel, Gaz de France will be involved in the development of reactors 3 and 4 at the nuclear power plant Cernavoda. Electrabel is one of six private investors, along with state company Nuclearelectrica, selected for the construction of two new nuclear reactors. If built, around 30 per cent of the national supply of electricity could be delivered by Cernavoda.
But this project is stagnant at the moment, due to the Government’s decision to renegotiate the investors’ stakes.
In thermo power, Gaz de France wants to acquire a plant in east Romania, Electrocentrale Galati, which has 535 MW installed power. If approved, Gaz de France will create a mixed company with its owners, state thermo power company Termoelectrica. The French group also wants to buy smaller thermo power stations in Doicesti, Dambovita county and Borzesti, Bacau county.
Gaz de France is targeting the supply of gas for two pipes which could insure the inter-connection between Romania and Hungary, the 109 km Arad-Szeged pipeline, and Romania and Bulgaria with the three km Giurgiu-Ruse line.
Currently, Romania acquires its imported Russian gas through a gas pipeline from Ukraine. These two new pipelines should complement the Nabucco project, a central Asian to European gas pipeline intended to diversify the EU’s gas sources.“In this way, the country lowers its dependency on Russian gas, making possible the availability for more gas sources until the Nabucco project will start,” Fournier says.
Romania’s inter-connection with Hungary should start operating at the beginning of 2010. The country’s natural gas resources are available, but studies reveal they will run out in the next generation. Now Romania uses its own resources for around 60 per cent of its gas needs, while the rest comes from Russia.
“In ten to 15 years from now the proportion will be distorted and around 60 per cent of the country’s gas necessities will have to come from Russia, unless diversification of sources is decided before,” says the French businessman.
Gaz de France wanted to be part of the Nabucco project and Romania has supported its candidacy, but one of the plan’s stakeholders, Turkey’s petrol pipeline company Botas, has refused. Any new entry in the project needs to be approved by all the energy companies involved in the project. Along with Botas, Bulgaria’s Bulgargaz, Romania’s Transgaz, Hungary’s MOL, Austria’s OMV and Germany’s RWE have signed agreements to build the pipeline.
“We remain open to any serious proposal of the Nabucco consortium, but if we are not part of it, that does not mean we do not wish them the best,” adds Fournier.
Gaz de France acquired last year the majority stakes in two underground gas deposits, Amgaz in Sibiu county and Depomures in Mures county, which the company intends to enlarge. Around 100 million Euro will be invested by 2012 to increase storage capacity of these deposits from 350 million to 900 million cubic metres. Now the company owns 12 per cent of Romania’s gas storage capacity and by 2012 plans to increase this to 25 per cent.
Salty opportunity
The energy company is discussing with state-owned salt company Salrom to create gas deposits in underground salt mines. Salrom has massive deposits in seven mines across the country. An investment in one such deposit is worth 100 millions of Euro, but would facilitate the energy company’s access to gas.
In Romania gas deposits are stored underground in cavities where gas has been found before. But it can take days to access gas from these locations, while extraction from salt mines is a faster process, that can quicken the rate of gas to market.
“In the winter there are a few very cold days when temperatures reach extremely low levels and when a supplier needs to get the gas faster, but this is difficult with the deposits we currently have,” Fournier says.
Gaz de France has 1.2 million clients in Romania and around 7,500 people are employed by Distrigaz Sud alone. Romania is a priority for the company, but Fournier says it is difficult to predict what will happen to Romania’s electricity market in the next 15 years, because both the Nabucco and Cernavoda projects lack definition.
“Romania will continue to export electricity,” says Fournier, “The only unknown factor is how much electricity this will be.”
Who is Tanguy Moulin Fournier?
An admirer of Bucharest’s classic architecture, Tanguy Moilin Fournier believes the Romanian Capital must have been culturally rich between the two world wars. “Nearly 100 years ago there were people who used to spend two months in Vienna, two in Bucharest and who went to the opera in Paris and I believe the ties between all the European countries in general were stronger,” says Fournier.
Fournier also enjoys travelling through the local countryside. “Romania has maintained the tradition and the origins, the simple things in the countryside where one can see the change of seasons,” he says. “In the autumn people harvest their crops and prepare for a cold winter, while in the spring the rush starts once again to plough the land and plant the seeds.”
by Ana Maria Nitoi
