EXCLUSIVE: "Gazprom" keeps us another 20 years at the mercy of the intermediaries

• Romania will only be allowed to buy supplemental deliveries of gas directly from the source

• Russia doesn"t want "in" on our electricity production

Russia"s "Gazprom" will be extremely happy to negotiate the price of gas they deliver to us, but only for any amounts which exceed the ones already contracted, which cover another 21 years, until 2030. Gazprom"s press office had the following to say: "We currently have two contracts concluded with Romania, with Conef Energy and WIEE, which are set to expire in 2030. Only in the case of increased demand for natural gas, we might consider other contracts".

Therefore, it looks like we won"t be getting a bigger discount for natural gas imported from "Gazprom" over the next two decades. We will only get cheaper gas in the case of a drop in the international prices, to which the price of Gazprom"s natural gas is pegged.

According to international quotations, the price of gas futures for November 2009 for 1,000 cubic meters of gas is only 4.89 dollars, whereas in the beginning of 2008, prices were at 8 USD/1,000 cubic meters.

Romania pays a significantly higher price than other countries in the region for natural gas delivered by "Gazprom". Romania"s domestic output of natural gas can cover up to 70%-80% of its domestic consumption, unlike its neighboring countries which import almost all their natural gas from the Russian Federation. "Gazprom" officials also said that they have no short term plans to expand into electricity production in Romania. When asked if they intend to cooperate with Romgaz in any projects to take over and modernize existing Thermal Power Stations (CET), Gazprom officials said: "We are currently reviewing several avenues for cooperation in the gas sector, such as transport routes or the developing of new routes, as well as subterranean gas deposits. For the moment, we do not have any plans to expand our operations in the electricity sector".

"Romgaz" recently signed a memorandum of understanding with "Gazprom" in the segment of storage of natural gas, with the two companies to split the investments and profits equally.

The memorandum will allow the development of major projects, such as the gas warehouse in Roman - Mărgineni, with a storage capacity of 2 billion cubic meters. "Gazprom" officials also said: "Our involvement in the extraction of Romania"s natural gas storage capacity will help eliminate interruptions in the natural gas supply. Together with the improvement of transport routes, increasing storage capacity will help us ensure the stability of gas deliveries to Turkey and Greece".

Domestic producers "Romgaz" and "Petrom" currently cover two thirds of Romania"s natural gas needs, with the rest coming from imports.