Transit Wars: Why Romania Is Gassing Up ahead of Bulgaria

A rather significant piece of news about natural gas transit went largely unnoticed by the Bulgarian public last week. What is more, apparently, it failed to ring any bells among the Bulgarian leadership, either.

Last Tuesday, Romania got an impressive deal with Azerbaijan and Georgia for the transit of liquefied natural gas from the Caspian Sea to Europe via the Black Sea.

The agreement sets up a joint venture called AGRI (Azerbaijan, Georgia, Romania Interconnection) which provides for the building of liquefied natural gas terminals on the Black Sea - in Georgia and in Romania’s major port of Constanta.

Romania’s Economy Minister Videanu stated, as quoted by Romanian media, that the AGRI transit of gas from Azerbaijan to the EU will probably be running before the much advertised Nabucco pipeline. Sure, it will be 5-6 times smaller in terms of the volume of transited natural gas but at least it is very realistic.

Minister Videanu was quoted as saying that Romania has already completed its gas network connection to Hungary and is due to complete one with Bulgaria. Thus, “Romania will play a very important role in natural gas supply to Europe”.

Now, Minister Videanu is a person whom I think I believe. Because he is talking about concrete developments that are being brought about through specific steps.

I cannot say the same about Bulgarian politicians. Because I have been hearing from them for ages that Bulgaria “will play a very important role in natural gas supply to Europe.” The important difference with Romania is that Bulgaria does not seem to be making the specific steps along this road.

To be fair, Bulgarian officials – from President Parvanov to the energy ministers of the current and previous government – have been having numerous meetings with representatives of energy-rich states from the Middle East, the Caucasus, and Central Asia over the last few years.

They even managed to get promises from countries such as Azerbaijan, Kazakhstan, Egypt, and Qatar that they will sell certain amount of natural gas to Bulgaria. The major problem with such promises Bulgaria can’t get the deliveries because the respective gas transit pipelines have not been built yet – and this goes not just for Nabucco.

To be even fairer – the Bulgarian leadership seems to have figured out recently – especially after the 2009 Russia-Ukraine gas dispute that led to a cutoff of Russian gas supplies to Bulgaria in the middle of the winter – that one realistic option is to go for liquefied natural gas deliveries. Thus, Bulgaria has considered building a LNG terminal on its Black Sea coast while leaving aside projects for a joint terminal with Greece on the Aegean or with Turkey, again on the Black Sea.

In addition to potential Middle East sources such as Oman and Qatar, however, over the recent months the Bulgarian leadership has been inching towards a deal to get LNG from Azerbaijan via Georgia. In other words – it was going for exactly the deal that the Romanians signed with the two crucial Caucasus states.

This might lead to a rather ridiculous situation in which Bulgaria – which practically borders Georgia through the Black Sea the same way Romania does – will be importing LNG from the Romanian terminal in Constanta. This is the same as having goods produced in Belgrade imported to Sofia via Bucharest. Not to mention the failure to materialize the much anticipated role of Bulgaria as an energy transit hub of the Balkans.

Quite frankly, that is nothing new. There seems to be a pattern – we Bulgarians talk a whole lot about something whereas the Romanians somehow pull their stuff together and do it.

The same story goes for the Black Sea-Danube canal that the Romanians finished in the 1980s (even if by using forced labor). In contrast, there has been talk about a Bulgarian Black Sea-Danube canal from Varna to Ruse since the first half of the 19th century.

Another is example is the fact that Romania has got only one decent sea port – Constanta – but it is fully utilized, and is one of the biggest in Europe. The port of Constanta is bigger than Bulgaria’s Varna and Burgas combined as these two remain largely underdeveloped.

Sure, Romania is a bigger country and a bigger market but it also appears to have had a proper strategy in terms of utilizing what it’s got.

So far Bulgaria has failed miserably in taking advantage of its cross-roads location. It could provide the shortest north-south and east-west transit routes (that is, running along straight parallel and meridian lines).

However, instead of becoming a real transit and transport hub for the trade of three continents, Bulgaria – a country whose leaders have failed to complete a single highway in 30 years – is letting its neighbors nibble at its one advantage by attracting traffic through their own more roundabout but better functioning routes.

This criticism is not based on any nationalist lines – even though there wouldn’t be anything wrong with that as this is people view things even in Europe, the most “post-modern” part of the world.

Yet, these views should be seen as criticism of one EU region vs. another. Because there should be healthy competition in the development of transit and transport routes as in anything else – let the better road win. It’s not about competition along national lines per se – the same principle would apply if a western Romanian-Bulgarian transport corridor is competing with an eastern one.

It’s about criticizing an entity that is failing the competition principles – despite its prerequisites, Bulgaria simply poses no competition to the Romanians – or to anybody else in the Balkans – as far as transport and transit are concerned.

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