transgaz the national gas transmission company from romania share capital 117,738,440 ron economy...
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TRANSGAZ TRANSGAZ THE NATIONAL GAS THE NATIONAL GAS TRANSMISSION COMPANY FROM TRANSMISSION COMPANY FROM
ROMANIAROMANIA
SHARE CAPITAL 117,738,440 RON
ECONOMY AND
FINANCE MINISTRY
75%
PROPRIETY FUND
15%
FREEFLOAT
10%
Headquartes:Headquartes:Constantin I. Motaş Street; No 1 551018 Mediaş CitySibiu County,RomaniaTel +40/269/803333Fax +40/269/839031www.transgaz.ro
SNTGN TRANSGAZ SAThe National Gas Transmission Company
General Information
Established in April 2000, as a result of the legal unbundling of the former vertically integrated national gas company “Romgaz”;
Operates the National Gas Transmission System, which is state owned, based on a long term Concession Agreement;
Main activities: Gas transmission International Gas Transit Dispatching Research and Design in the Field of Natural Gas
Transmission
SNTGN TRANSGAZ SAThe National Gas Transmission Company
Ownership:75% - The Romanian State represented by the
Ministry of Economy and Finance 15% - The “Proprietatea” Fund
10% - Free float traded on BSE
TRANSGAZ was firstly rated BB+ with positive perspectives by Standard & Poor’s on March 2007 and since February 2008 has been rated BBB- fact which places Transgaz within the category of companies with the “investment grade” .
SNTGN TRANSGAZ SAThe National Gas Transmission Company
Historic Landmarks
First gas pipeline was built in 1912 – 1914 in Transylvania;
1912 - Establishment of the first company in Europe specialized in gas transmission: “The First Transylvanian Company for the Transmission of Earth Gas”;
1928- The first gas compressor station in Europe, at Sarmasel (Mures County).
1956 –The basis of the National Gas Transmission System is set, having a radial shape, from the center to the extremities of the country.
TRANSGAZ’S MAIN ACTIVITIES
Domestic gas transmissionDomestic gas transmission – – regulated activityregulated activity TRANSGAZ operates NTS under a concession agreement valid until 2032, signed
with National Authority for mineral Resources and based on the licenses granted by the National Energy Regulatory Authority (“ANRE”).
For using the NTS, TRANSGAZ pays a 10 % royalty fee per year of the total income obtained from its transport (recognized in tariff) and transit activities.
ANRE sets the transmission tariffs according to “revenue cap” methodology.
International gas transit through dedicated pipelinesInternational gas transit through dedicated pipelines – – non-regulated non-regulated activityactivity
Prices set based on bilateral agreements
MISSION AND RESPONSIBILITY
Maintain the functionality of the National Transmission System; Provide gas transmission services under reliable and safe terms;
Securing transparent, non-discriminatory and fair access conditions to all market participants
FINANCIALFINANCIAL OVERVIEWOVERVIEW
PROFIT & LOSS ACCOUNT
Year ended at 31.dec.2006
Year ended at 31.dec.2007
2007/2006 30 June
2008
SPECIFICATION-thousand RON RELATIVE
CHANGES (%)
NET TURNOVER 909.017 1.038.867 +14,28 543,078
OPERATING REVENUES 941.200 1.051.657 +11,74 549,091
OPERATING EXPENSES 675.882 780.370 +15,46 385,964
GROSS OPERATING RESULT 265.318 271.287 +2,25 163,127
FINANCIAL REVENUES 41.096 12.580 - 69,39 14,970
FINANCIAL EXPENSES 20.124 14.537 - 27,77 8,192
GROSS FINANCIAL RESULT 20.972 (1.957) -109,34 6,778
CURRENT PROFIT 286.290 269.330 -5,93 169,905
TOTAL REVENUES 982.296 1.064.237 -8,35 564,061
TOTAL EXPENSES 696.006 794.907 +14,21 394,156
GROSS PROFIT 286.290 269.330 -5,93 169,905
TAX ON PROFIT 48.377 45.324 -6,32 26,305
NET PROFIT 237.913 224.006 -5,85 143,600
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
2006 2007 30 JUNE 2008
PROFIT & LOSS ACCOUNT - thousand RON
NET TURNOVER TOTAL EXPENSES TOTAL REVENUES NET PROFIT
SC. PETROM SA ~ 5,24 bcm
PRODUCTION TRANSPORTATION DISTRIBUTION
Natural gas flow
S.N.G.N. ROMGAZ S.A.
~ 6 bcm
OTHERSPRODUCERS
~ 1 bcm(areas in
concession)
NATURAL GASIMPORT
SUPPLIERS~ 6 bcm
TRANSGAZ S.A.NATURAL GAS
TRANSPORTATIONNATIONAL COMPANY
(Transportation system operator)
LICENSED AND AUTHORIZEDNATURAL GASDISTRIBUTORS
Cash flow
RESIDENTIALAND DOMESTIC
CONSUMERS(POPULATION)
INDUSTRIALCONSUMERS
Competitive Market
Regulated Market
Competitive Market
ROMANIAN GAS MARKET OVERVIEW
THE NATIONAL TRANSMISSION SYSTEM (NTS)THE NATIONAL TRANSMISSION SYSTEM (NTS)
0,00
2,00
4,00
6,00
8,00
10,00
12,00
14,00
16,00
18,00
2005 2006 2007
Gas Consumption in Romania Volume of gas transported trough NTS
GAS CONSUMPTION VERSUS GAS CONSUMPTION VERSUS GAS TRANSPORTED (2005- 2007)- GAS TRANSPORTED (2005- 2007)- BCMBCM
INDICATOR- BCM 2006 2007 2008 from which:
H 01/2008
Volume of gas transported trough NTS
15,2 14,6 14,7 7,6
Volume of gas circulated 18,3 17,0 17,3 8,9
Ordered transit capacities 23,7 23,8 23,8 11,9
Quantities of sold import gas 0,087 0,157 -
THE INFRASTRUCTURE OF THE NATIONAL NATURAL GAS TRANSMISSION SYSTEM (NTS)
13.110 km of transmission pipelines and gas supply joints, including over 560 km of international transit pipelines with diameters of 1000 and 1200 mm (42’’ and 48’’) and working pressure between 6 and 40 bars;
21 valve control stations and/or technological nodes; 961 regulating, metering- delivery stations of the gas
supplied; 2 import gas metering stations; 6 gas metering stations on the gas transit pipeline; 6 gas compressor stations located on the pipeline route; 857 cathodic protection stations of the gas transmission
pipelines; 575 gas odoration stations.
The NTS transport capacity is around 40 BCM per year;
Around 8,400 km of the network’s total length have useful life of more than 25 years
TRANSIT ACTIVITY – PIPELINES & CAPACITIESTRANSIT ACTIVITY – PIPELINES & CAPACITIESTRANSIT CAPACITY (bcm/year)TRANSIT CAPACITY (bcm/year)
0
5
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15
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25
30
2005 2006 2007
2005 2006 2007
• The transit activity is a non-regulated activity being carried out through dedicated pipelines
• Transgaz provides gas transit through 3 pipelines with total capacity of approximate 28 billion cubic meters as of 2005
• 2 contracts on transit were concluded with GAZPROM Export, one with maturity in 2011 and the other with maturity in 2023. Both contracts contain clauses which give the possibility to prolong their maturity with successive 5 year periods.
• 1 contract is concluded with BULGARGAZ with maturity in 2011
ExistingInterconnectio
ns
Interconnection Pipeline Interconnection Pipeline Szeged – AradSzeged – Arad
Russe – GiurgiuRusse – Giurgiu Pipeline Pipeline
Mediesu Aurit
Isaccea
NABUCCNABUCCOO
New ProjectsNew Projects
THE NATIONAL TRANSPORTATION SYSTEM – MAPTHE NATIONAL TRANSPORTATION SYSTEM – MAP
SNTGN TRANSGAZ SAThe National Gas Transmission Company
Implementation of European Energy Policies
Romania – EU member state - member of the Energy Community of South - East Europe
The implementation of the European energy regulations is mandatory for the achievement of the European internal energy market.
TRANSGAZ’ actions in this regard:
- restructuring process for the unbundling of the regulated activities from the non-regulated activities. - implementation of a network code ensuring the implementation of the transparency and non-discrimination provisions of regulation 1775/2005.
TRANSGAZ is a member of Gas Infrastructure Europe
SNTGN TRANSGAZ SAThe National Gas Transmission Company
Considering the background defined by the regulatory framework and the development tendencies at European level, TRANSGAZ envisages the following development priorities:
1. Rehabilitation and modernization of the national gas transmission system:
reconsidering the main pipelines system and replacement of old transmission pipelines;
modernization of gas metering and regulating stations; rehabilitation and modernization of gas compressor stations; implementation of a SCADA system reduce pollution and assure the environmental protection by
complying with the European environmental norms
2. Development of the transmission system in new consumption areas;
SNTGN TRANSGAZ SAThe National Gas Transmission Company
3. Development of the transit activity and of new interconnections with the neighbouring systems:
The main condition for achieving the internal European energy market is to interconnect the national networks
TRANSGAZ is aiming to implement the following
transit/interconnection projects:
- The NABUCCO project;
- Interconnection between Hungary and Romania
- Interconnection between Bulgaria and Romania
- Interconnection between The Ukraine and Romania
Nabucco pipeline project, gas bridge between Asia and Europe
RWE
SNTGN TRANSGAZ SAThe National Gas Transmission Company
General Data about the NABUCCO Project
Expected off-take in Transit countries : 12.0 – 15.0 bcm/y
Total capacity to Austria-Baumgarten : 13.5 – 16.0 bcm/y
Main potential sources : Caspian basin, Iraq, Egypt (Arab Gas Pipeline), Iran
Total Investment (CAPEX) for plateau level (costs 2008): 7.9 billion EUR
Expected investment in Romania (costs 2008) : 1.32 billion EUR IRR target of the project: 13% after tax
Debt /Equity ratio: 70:30
FEED Design: 2008-2010
Expected construction start-up : 2010
Expected operations start-up : 2013
Technical data of the Nabucco project
Pipeline length 2.841 km (main line without feeders) 223 km Georgian feeder (42 inch) 218 km Iranian feeder (56 inch) Turkey 1.558 km (main line without feeders)
Bulgaria 392 km Romania 457 km Hungary 388 km
Austria 46 km Main pipeline diameter 56 inch (1400mm) Steel grade X70 according API 5L MAOP 90 bar Compression 6 or 12 compressor stations (depending on
scenario) total installed power 266-529 MW
Transport capacity 25,5 bcm ( base case) - 31 bcm (high case), excluding fuel gas
Nabucco pipeline route description –Romanian section
Total length on Romanian territory: 457 km
A series of obstacles will have to be overcome namely: 59 rivers (including three majors: Danube, Jiu, Mureş), 8 national roads, 22 county roads, 29 dirt roads, 8 railways
The pipeline will be fitted with the following AGI-s:
one compressor station with installed power of 31-37 MW
two gas import stations (in Craiova & Arad-Nadlac areas)
one custody transfer metering station (in Arad-Nadlac area)
2 “pig” launching/receiving stations
Nabucco Project current status
Concluding a contract with Penspen Ltd from Great Britain as owner engineer – December 2007
Accesion of RWE Germany as a new shareholder in Nabucco Project – February 2008
Starting the tender procedure for selecting of the local engineers – April 2008
Cooperation with the new financial consultant- HSBC from Great Britain in order to elaborate a the new updated financial – economic model – in the view of obtaining financing for Nabucco Project
Actual market Survey which shows huge demand for Nabucco capacities – August 2008
Nabucco Project – activities in progress
To be concluded an Intergovernmental Agreement
The Regulatory Authorities have granted the Exemptions from EC Dir. 2003/55/EC and the next step is to submit them for EU approvals
The establishing of Nabucco National Companies
Open season Process for capacity allocation- will start after the legal framework (IGA and Exemptions) is finally established
SNTGN TRANSGAZ SAThe National Gas Transmission Company
Route of the NABUCCO Pipeline
Benefits of Nabucco project for the Romanian gas industry
Diversification of gas supply sources;
Balancing of the Romanian gas transport system through the intakes performed via the two import points;
Stimulation of the competition on the internal gas market;
Enhancing of the supply security;
Access to low production cost gas reserves;
Strengthening the role of Romania as transit country for major energy corridors;
Important revenues for Transgaz from dividends & internal transportation tariff;
Stimulation of horizontal industries which will contribute to the realisation of the project.
SNTGN TRANSGAZ SAThe National Gas Transmission Company
Interconnection of the Hungarian - Romanian Transmission Systems;(The Szeged – Arad pipeline)
Main Features:
Designed capacity: 1.5 – 2.0 bcm/year Diameter: 700 mm Total length: 108 km
On July 2008 a joint development agreement have been concluded between the FGSZ Natural Gas Transmission Company, as the owner and operator of the Hungarian high pressure natural gas pipeline system and Transgaz, as the operator of the Romanian transmission system.
SNTGN TRANSGAZ SAThe National Gas Transmission Company
The Interconnection of the Ukrainian and Romanian Gas Transmission Systems;
(The Cernăuţi – Siret Pipeline)
Main Features:
- Designed capacity: 1.5 bcm/year
- Diameter: 600 mm
- Total length: aprox. 30 km
SNTGN TRANSGAZ SAThe National Gas Transmission Company
The Interconnection between the Bulgarian and Romanian Transmission Systems;(The Russe – Giurgiu Pipeline)
Main Features:
- Designed capacity: 1.5 bcm/year
- Diameter: 500 mm
- Total length: aprox. 8 km
Conclusions The Romanian gas market generally follows the trend of the European gas
market;
The increase of domestic consumption is similar with the increase in the European markets and is registered in the same time with the decrease of domestic production and increase of imports;
Unlike the states of the EU which can project part of their gas consumption increase based on LNG imports, Romania will remain dependant of onshore pipelines imports;
This dependence, can be a medium and long term impediment for the durable development of the economy;
For Romania in particular and for the European Union in general, it seems obvious that a diversification of the gas supply sources would be beneficial;
The major gas reserves of the Caspian and Middle East can become accesible through the development of the Nabucco project.
SNTGN TRANSGAZ SAThe National Gas Transmission Company
Thank you
for your kind attention !