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Cablegate: Romania: A Strong Ally On Energy Diversification

VZCZCXRO8266
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHBM #0268/01 1010610
ZNR UUUUU ZZH
P 100610Z APR 08
FM AMEMBASSY BUCHAREST
TO RUEHC/SECSTATE WASHDC PRIORITY 8133
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHAH/AMEMBASSY ASHGABAT 0042
RUEHTA/AMEMBASSY ASTANA 0014
RUEHKB/AMEMBASSY BAKU 0039
RUEHSI/AMEMBASSY TBILISI 0216
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 BUCHAREST 000268

SIPDIS

USEU BRUSSELS FOR AMB GRAY
EEB FOR SMANN, SGALLOGLY
EUR/FO FOR JGARBER, MBRYZA
DEPT FOR EUR/CARC MICHAEL CARPENTER
DOE FOR TTILLER
NSC FOR LCATIPON
STATE PASS USTDA FOR DSTEIN

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ENRG EPET EINV PGOV PREL RO
SUBJECT: ROMANIA: A STRONG ALLY ON ENERGY DIVERSIFICATION

REFTEL: BUCHAREST 216

Sensitive but Unclassified, not for Internet distribution.

1. (SBU) Summary: In an April 2 meeting with visiting DAS Matthew
Bryza, Ministry of Economy and Finance State Secretary Viorel
Palasca strongly reaffirmed Romania's commitment to the Nabucco
pipeline project. Romania continues to seek U.S. support for its
efforts to ensure energy security through supply diversification.
The discussion focused on how to bring Azeri, Turkmen and possibly
Kazakh gas into Nabucco. The Government of Romania (GOR) is also
committed to an LPG/LNG terminal project in the port of Constanta as
part of its energy diversification strategy. End Summary.

2. (SBU) In a cordial meeting with DAS Matthew Bryza, State
Secretary Palasca emphasized that the GOR is a strong supporter of

SIPDIS
Nabucco, a project which it views as vital for European energy
security, and that Romania will not pursue other projects that are
competing with Nabucco, such as South Stream. Palasca, who assumed
his portfolio last autumn, has actively engaged Azerbaijan and
Turkmenistan to encourage these countries to provide enough gas to
fill Nabucco. While he privately admitted that Romania may be
interested in the White Stream pipeline project, especially if
Ukraine joins NATO, Palasca believes that Nabucco is the best
possible project, both for Romania and the EU.

3. (SBU) Palasca requested USG support in engaging Turkey on gas
transit for Nabucco, as well as Bosporus transit for tankers to
supply the proposed LPG/LNG project in Constanta. He took note of
DAS Bryza's recommendation that, while Romania could expect support
from the U.S., Romania itself should take the lead on the talks with
Turkey on Bosporus passage. Palasca also asked for USG support in
attracting Turkmen gas to Nabucco, and in encouraging Azerbaijan and
Turkmenistan to consider delivering LNG across the Black Sea to the
proposed Constanta LPG/LNG terminal. Palasca asked Bryza to pass
the message to his Azeri and Turkmen counterparts that Romania would
welcome energy investments by them along the lines of KazMunaiGaz's
(KMG) purchase of Rompetrol last year.

3. (SBU) Bryza and Palasca discussed the amount of gas available for
Nabucco, with Palasca saying he understood that the Azeris could
export at least 12 billion cubic meters of gas, possibly more if
offshore fields are fully developed. The Romanians expressed some
concern that the Chinese could cut a deal for Azeri gas if there is
no forward movement on Nabucco. Palasca described progress made by
the EU-appointed Nabucco coordinator, Josiah van Aartsen, in getting
Turkey to negotiate a more favorable gas transit agreement with
Azerbaijan under which Turkey would be a gas transit country, rather
than a gas trader as it had initially envisaged.

4. (SBU) The proposed LNG terminal at Constanta is another priority
for Romania, Palasca confirmed. DAS Bryza emphasized that the
Romanians must take the lead on negotiating tanker passage through
the Bosporus with Turkey. Palasca responded that the GOR
appreciates USTDA assistance in evaluating the feasibility of this
project, and that Romania will develop the project with a U.S.
partner if it proves commercially viable. Romania considers
Azerbaijan and Turkmenistan as possible alternate sources of LNG to
avoid the Bosporus passage issue, he said, taking note of DAS
Bryza's suggestion that the countries explore the possibility of
locating a gas liquefaction plant on Georgia's Black Sea coast.

5. (SBU) Comment. Although clearly nervous about neighboring
countries' recent deals with Gazprom on South Stream, Romania
remains a steadfast Nabucco supporter and so far shows no indication
of wanting to cut its own deal with the Russians. Still, the
Romanians seek regular reassurance that the U.S. is fully engaged
and that Nabucco remains viable despite recent developments. We
will continue to welcome visits from DAS Bryza and other key USG
officials to help persuade Bucharest to stay the course on energy.
Politically, Romania's leadership needs to demonstrate progress on
energy supply diversification, not just with regard to Nabucco, but
also on other projects such as the LNG terminal proposal. End
comment.

6. (U) DAS Bryza did not have an opportunity to clear this cable.

BUCHAREST 00000268 002 OF 002

TAUBMAN

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