2019 has been of maximum turbulence for the Romanian supply market, to which the private environment has adapted in various manners. We discussed with Harald Kraft, General Manager of the AIK Energy Romanian Subsidiary about the context in which the company has intensified its presence on the local market and about near future prospects.
Dear Mr. Harald Kraft, you are an excellent connoisseur of the Romanian energy market, despite the fact that AIK Energy is a relatively new presence on the local supply market. The involvement of AIK occurs during a period in which suppliers in the commercial segment feel a pressure that will convince many to withdraw. Which are the opportunities you’ve identified?
True enough, AIK Energy is a fairly new presence on the gas and energy market, but I can assure you that the members of the AIK team have accumulated years of meaningful experience in these fields. We see the opportunities in an activity strategically consolidated in Central and South-Eastern Europe. For example, we established subsidiaries in Austria, Hungary, Republic of Moldova and Ukraine and we are in full process – have mostly succeeded already – of obtaining all licenses necessary in order to become an important player on the European markets. In other words, the AIK Energy group can act flexibly on neighbouring markets and achieve synergies. Markets will become even more interconnected than they currently are, and we are ready for it.
Furthermore, we are not solely based on energy; we are also a trader of petroleum products. For example, in the Republic of Moldova we are developing a mini-refinery and a deposit for petroleum products in a free zone, and we are also targeting green energy projects. Getting involved in the production of gas and crude oil is also not out of the question in the future.
In 2019, we noticed deep changes in the volumes and sources of provenance of imported natural gas in Romania. How is AIK Energy positioned in this market context?
During the first semester of the current year, AIK played among the first top suppliers on the free market. Thanks to our presence on several markets, we managed to have an important role in relation to gas import.
Do you see an important business potential in gas import on the Bulgarian route, maybe even liquefied natural gas, through the Southern Gas Corridor?
Sure, the Southern Gas Corridor will have potential. Turkstream and TANAP will bring additional gas which can reach Romania as well. We shall se what quantity will be available for Romania. The project of an offshore regasification plant near Alexandroupolis seems very tempting due to its position in Northern Greece and its proximity to the Southern Corridor.
The decision to freeze prices for natural gas of internal production is considered responsible, at least partly, for the price increase in the competitive market segment. Do you agree with this perspective?
I absolutely agree. This summer, we had the highest price for industry in the competitive market. But this is not only generated by the price cap for the residential and central heating, but also by the gas surcharges. If we consider a price of RON 110 /MWh on the competitive market, only the surcharges and the contribution imposed by GEO 114/2018 diminish the income with about RON 32 / MWh. Furthermore, the producer finds itself obligated to sell about half of its production at an artificially capped price. Of course this will be compensated through a higher price on the competitive market.
Discussions on Romania as regional natural gas hub have been refuelled after Transgaz’s announcement regarding its association with CEGH for the establishment of a joint stock company, Romanian Gas Hub, with the purpose of operating the Virtual Trading Point (PVT) in Romania. What’s your view on this initiative? Can it contribute to the maturing of the local natural gas market?
A large quantity is already being transparently traded at BRM and OPCOM. On the other hand, the presence of a PVT and of a PVT operator does not automatically mean the maturing of the market. As long as the state intervenes on the market – e.g. by capping the price, the producer’s obligation to sell with priority for Romania, the obligation to store, the centralized market obligation – we cannot talk about a mature market.
There are commenters stating that the involvement of CEGH among this company’s shareholders would place the OMV group, which controls one of the large natural gas suppliers of Romania, in a privileged position compared to other natural gas suppliers. Do you agree?
No, I do not agree. I have faith that the aforementioned group will act in a responsible and professional manner. As I said earlier, trading on a centralized market is carried out in a public and transparent manner for all participants, and I do not believe that a company affiliated to the market’s operator might have an advantage.
Which are the actions that AIK Energy carries (will carry) out in order to consolidate its position on the Romanian supply market? Are you only targeting the natural gas market or are you also analysing the electricity market?
AIK is already a licensed electricity trader and is currently trading in this segment. The application for the supplier license is in progress. Thus far, on the gas sector, we have focused on the wholesale sector, but we are also starting sales in the industrial sector.
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This interview firstly appeared in the printed edition of energynomics.ro Magazine, issued in December 2019.
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