Opinion

Prof. Habil. Florinel Dinu Ph.D. Eng.: UPG and Transgaz to Collaborate on Hydrogen Production and Storage

The importance of research aimed at enabling the introduction of hydrogen as a clean fuel is a stated policy goal of the EU. Rector of the Petroleum-Gas University (UPG) of Ploiesti Prof. Habil. Florinel Dinu Ph.D. Eng. recounts how UPG and National Gas Transmission Company Transgaz partnership on Hydrogen production and storage projects will help to reduce environmental pollution.


There has been a lot of talk about a V-shape economic recovery, but the factor that will have a greater influence on oil in 2021 is the vaccination process. Increases in COVID-19 positive tests after holidays and the third wave of the pandemic (with unpredictable effects) force governments to become more determined with the measures of blocking economic and social activities.

They should have, at least in the short term, an impact on oil prices. A possible increase in the first quarter in the number of COVID-19 cases in Japan, South Korea and South-East Asia countries is not however critical, in conditions in which the Asian outbreak is approaching a fraction of the cases observed in the first four months of 2020.

“In Europe, the situation is now uncertain, and we cannot rest assured that domestically we have a good situation. So, the number of cases of illness will be essential for energy performance in the first third of 2021,” says the Rector of the Petroleum-Gas University (UPG) of Ploiesti, Prof. Habil. Florinel Dinu Ph.D. Eng.

The new year started with significant oil quantities in the tank farms existing around the world. Total inventories in the US are slightly below 500 million bbl and the surplus to the average of the last five years is at a difference of 50 million bbl. Most of the global surplus is located in the US, on the Gulf of Mexico coast, and in China (being an ambitious buyer of strategic reserves during price decline in 2020).

The pandemic has transformed business and holiday travel and aircraft fuel is important for the recovery of the oil market. The decline in global demand for aircraft fuel will have an impact on refineries throughout 2021, in conditions of reasonable scenarios. As such, the lack of air traffic was the factor of blockage for refineries in nine of the 12 months of 2020.

“In the last decade, many new refineries, but also the existing ones, increased production for aircraft fuel, as it was seen as a rapid growing hydrocarbon that would ensure profits, especially in emerging countries, which currently dominate the most popular air routes. The production of aircraft fuel was reduced to the minimum by the pandemic. It is safe to say that globally, the demand for aircraft fuel will not return anywhere in the world close to the level of consumption in 2019, in 2021, regardless of whether COVID-19 vaccinations will be remarkably successful.

As regards Romania, domestic production (3.47 Megatons) reached approximately 33% of the oil demand in 2019, imports representing 6.84 Megatons. In 2019, natural gas accounted for 30% of the gross energy consumption, while crude oil and petroleum products accounted for 29% of the gross energy consumption. Romania covers most of its gas requirements from domestic production. 2020 was an atypical year, as it has been mentioned before, but probably for a situation of relative normalcy, oil/gas consumption will be slightly lower, and the ratio will remain at 1/3 the share obtained domestically by OMV Petrom (in particular) and 2/3 the imports processed at the Rompetrol and Lukoil refineries. However, the capacities of refineries in Romania are much higher than domestic consumption and a much higher oil quantity than domestic consumption is processed and sent for export,” Rector Florinel Dinu also says.

“Natural gas necessary for domestic consumption is produced almost entirely by the two major domestic producers, Romgaz and OMV Petrom, and the need for imported gas has disappeared due to a reduction of consumption through the domestic recession in several production activities. Trends of increasing coal consumption in order to extract hydrogen through various modern technologies and injecting it into the gas transmission pipelines of the National Gas Transmission Company can increase the use of natural gas with beneficial effects of return and reduction of environmental pollution. To solve this issue as soon as possible, Government’s involvement is needed. An important role in carrying out the project of reduction of environmental pollution by using hydrogen enriched natural gas is the partnership between the Petroleum-Gas University of Ploiesti and the National Gas Transmission Company Transgaz, established at management level. The University has submitted for this purpose a project financed from the European funds, which is the result of collaboration of two research collectives consisting of teachers from the faculties of Petroleum and Gas Engineering and Oil and Petrochemical Technology, with the aim of building and equipping two research laboratories with modern equipment and simulators for obtaining hydrogen by applying various technologies. Another issue of equal importance is the processes of hydrogen storage and its measured injection into gas trunklines. In this context, I can proudly say that the Petroleum-Gas University of Ploiesti, through its specialists, teachers of high scientific standing, aligns with the experience they have gained in over 73 years of activity and responds promptly to the greatest ENERGY challenges. We like to say that the Petroleum-Gas University of Ploiesti is a university forming energies,” Florinel Dinu also said.

The Government of Romania is concerned with capitalization on Black Sea gas, in conditions in which its price is starting to grow again. An important piece of legislation recently adopted is Law 256/2018 on certain measures necessary to implement petroleum operations by titleholders in offshore blocks (the Offshore Law), which introduces the windfall tax and a number of additional obligations for the offshore industry, such as: the obligation for subcontractors to maintain an affiliate in Romania during operations; the obligation of titleholders to purchase goods and services from Romanian and EU economic operators, based on equivalent technical and price conditions; at least 25% of the average annual number of employees of titleholders must be Romanian citizens and tax residents; rights related to oil and gas exploration and production (defined collectively as ‘petroleum’) can only be obtained based on a petroleum concession agreement concluded by the National Agency for Mineral Resources (NAMR) with the winner of public tenders (organized by NAMR) for the designation of petroleum zones; subject to specifics of each phase of the petroleum operations, there are also regulations issued by NAMR, the Competent Regulatory Authority for Black Sea Offshore Petroleum Operations, ANRE, the Ministry of Environment, the Environmental Protection Agency and other regulatory authorities. Therefore, we can notice a concern for supporting national interest that can be amplified in a year when the budget is restricted, and it is desired to attract additional resources.

Concern for controlling petroleum resources is also noticed in the amendments to the Petroleum Law No. 238/2004 and GEO No. 27/2020, referring to titleholders of petroleum agreements. Amendment to the Petroleum Law 238/2004 through GEO 27/2020 shows the importance of titleholders of petroleum agreements and the direct involvement of Romania’s Government in changing the titleholders, as well as in relation to legal persons from EU third countries. The important amendments refer to:

  • The titleholder of a petroleum agreement can transfer to another legal person the rights acquired and the obligations assumed only after approval, by Government Decision, at the proposal of the competent authority.
  • In the event where an operation takes place for taking over control over the titleholder of a petroleum agreement or a change in the ownership structure with controlling right over the titleholder, the new conditions shall be notified to the competent authority for approval, by Government decision.
  • The competent authority may refuse, on grounds of national security, the concession and execution of petroleum exploration, development and exploitation operations of a petroleum field by legal persons that are effectively controlled by third countries outside the European Union or third country nationals.
  • In the case of petroleum agreements in force, at the proposal of the competent authority, on grounds of national security, by Government decision it can be approved to unilaterally terminate the petroleum agreement.

Florinel Dinu is Rector at the Petroleum-Gas University of Ploiesti; Technical Judicial Expert of the Ministry of Justice; Expert of the National Agency for Mineral Resources; Expert and Project Verifier of the National Energy Regulatory Agency.

Daniel Lazar

Journalist

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