Embassy Press Release

Remarks Delivered by Ambassador Taubman On the Occasion of the Signing of the USTDA Grant to Romgaz for the feasibility study for an LNG terminal in Constanta

Public Diplomacy Office
Tuesday, September 16, 2008
Bucharest, Romania

State Secretary Palasca, Director Walther, Minister of Economy Vosganian, General Director Toth, distinguished guests, ladies and gentlemen:

There is no more important economic challenge facing Europe today, including Romania, than that of energy security. The United States is committed to assisting our friends and allies to diversify sources and means of energy supply. To that end, I am very pleased to witness the signing of this sizeable grant -- more than one million dollars – from the U.S. Trade and Development Agency (USTDA) to Romania’s Romgaz to study the feasibility of a Liquefied Natural Gas (LNG) terminal in Constanta.

Both the magnitude of this grant, as well as the presence of USTDA Director Larry Walther here with us today, are indications of the importance the United States attaches to this project, which, along with other initiatives throughout the region, will help to advance energy security both in Romania and throughout Europe.

2008 has been a heady year for Romania, with Bucharest playing host to the NATO Summit, the largest and most successful NATO gathering of its kind. The grant being signed today is another significant milestone. We are hopeful that this feasibility study will lay the groundwork for actual construction of an LNG terminal, which would ensure more secure supplies and enhanced competition in Romania's domestic market for natural gas.

If realized, this project, together with the proposed Nabucco pipeline project, would allow both consumers and wholesalers to purchase gas from the lowest cost sources and help create a true pan-European market for natural gas. Predictable energy supplies are too important to be left to the whims of any one supplier.

Access to LNG would create many new options for Romania, allowing it to tap into the burgeoning world market for LNG and to source gas from the cheapest supplier. The growth of LNG production and distribution in recent years means that eventually LNG will trade on a world spot market like oil. When this happens, traders will set the price like any other commodity, and gas will no longer be solely dependent on long, fixed pipelines and inflexible contracts. More options mean that countries won't have to accept a price as dictated by one supplier, because they will be able to seek better prices elsewhere. This very real possibility has driven the creation of a ring of LNG terminals around the Mediterranean as well as in northern Europe. It may not be too long before the Black Sea follows suit.

The United States welcomes competition in energy markets. It is only through competition that the best price and most secure energy supplies are guaranteed. This project directly supports this vision. I applaud the Government of Romania and Romgaz for their steadfast support in moving this project forward, and for their shared commitment with the United States to advancing energy security. I wish all parties in this important endeavor continued success. Thank you!

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