Wikileaks - MXXXII

149274 4/10/2008 6:10 08BUCHAREST268 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY 08BUCHAREST216|08BUCHAREST268 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.

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