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Romania’s Natural Gas Infrastructure

This brief offers a ‘big picture’ overview of the current state of the natural gas infrastructure in Romania: data on domestic gas system, pipeline length, physical interconnection points with neighboring countries, import points, new pipeline development, gas transit, cross-border gas interconnectors, state of play regarding their construction, and underground gas storage. A gas storage comparison is provided between all EU Member States, Turkey and Ukraine. The focus of the analysis is on hard infrastructure and not on soft (market and policy) aspects.

Domestic gas pipeline network

The gas transmission infrastructure in Romania reflects its status of a traditional gas producer, and has developed in sink with the domestic demand for gas, especially during the Soviet period, when Romania’s production reached also its peak (39 Bcm in 1986).^[1] The groundwork for Romania’s domestic natural gas transportation system was laid in 1956, when the decision to build a radial transport system was taken. Prior to that, only individual gas pipelines have been built, linking the consumer directly to the gas field (s). The new system was to start in central Transylvania (where most of the gas sources were located) and carry natural gas to all areas in the country. Ten pipeline systems have been designed and built in the 1960s-1970s. After 1975, these routes formed the national gas transport system (NTS), structured today in 9 subsystems.^[2] This lack of a unitary, system-based approach to NTS development prior to 1956, resulted in one third of natural gas being transported in closed systems. Within Romania’s NTS, entry/exit points are grouped based on pressure, size and significance of gas fields. As of September 2013, the NTS had 137 physical entry points, i.e. points where producers inject gas into the transportation system, as follows: 85 entry points (by Romgaz), 43 (OMV Petrom), 7 (Amromco Energy), 1 (Raffles Energy), and 1 (Lotus Petrol).^[3]

The Romanian NTS stands apart due to its low pressure (a result of outdated technology and low quality steel used at the time of its construction) and big number of exit points (232 exit points for direct consumers and 870 exit points for gas distributors^[4], in September 2013).

Transgaz is the company in charge of operating the national gas transportation system, gas transit and dispatch. Natural gas transportation is a natural monopoly activity, and is therefore regulated. Transgaz exercises its natural gas transportation duties based on the Concession Agreement it has with the National Agency for Mineral Resources (ANRM), approved by Government Decree (G.D) no. 668/2002 with any subsequent amendments and, on the transport and system operator license no. 1933 issued by the National Energy Regulatory Authority (ANRE) via Decision no. 3911/20.12.2013. The energy regulator (ANRE) sets the transportation tariffs.^[5]

The Transgaz operated network now has 13,318 km (of which 13,127 km are operational) and 553 km are transit pipelines, since Romania is also a gas transit country having some East-West flows for Russian gas which is headed for Bulgaria, Turkey, Greece, and Macedonia. The pressures in the domestic system are 6 – 35 bars while the pressure in the transit system is 54 bars. The pipeline diameter ranges between 50 mm and 1200 mm.

As of December 2013, Romania’s gas system had:

• 1,243 gas metering stations (of which 1,122 operational);
• 5 compressor stations (total combined power of 32 MW) equipped with technology from the ‘70s;
• 48 technological nodes or flow control stations (stații de comandă vane);
• 1,022 stations for cathodic protection;
• 815 gas odorizing units.

The status of pipeline usage and deterioration degree is presented below:

Duration in use for various gas infrastructure elements (2013)

Time in use	Transport pipelines(km)	Supply pipelines (km)	Gas Metering Stations
> 40 years	5,182	219	127
30 – 40 years	2,566	170	51
20 – 30 years	1,064	191	69
10 -20 years	1,043	553	464
< 10 years	1,463	676	532
TOTAL	11,318	1,809	1,243

Source: Transgaz, December 31, 2013

New pipeline development

The most important new gas transportation project in Romania shall be the 250 km pipeline that will feed the Black Sea gas to the national transport system starting with 2019-2020. It is estimated to cost 255 Million Euro. Since it shall link Romania, Bulgaria, Hungary, and Austria, it seems that this pipeline system will use part of the work that went into preparations for the Nabucco project. Mr. Ciprian Alic, Director for European Funds and International Relations at Transgaz even referred to it as “a continuation of the former Nabucco project” (o continuare a fostului proiect Nabucco)^[6] and spoke about it as a joint cross-border project for which the parties involved plan to access EU funding. An agreement was signed at the end of May 2014 between OMV Petrom, ExxonMobil and Transgaz regarding the terms of entry of the Black Sea produced gas into the national gas transportation system.

Romania’s Natural Gas Infrastructure (2013)

Gas interconnection points

Romania is interconnected with its neighbors at 9 different points^[7]:

• with Hungary: 1 interconnection point: Horia- Csanadpalota (RO-HU); operator: FGSZ;
• with Bulgaria: 3 interconnection points (operator: Bulgartransgaz), but at the same location – Negru Vodă I, II, and III;
• with Ukraine: 5 interconnection points, but at 2 different locations (operator for all 5: Ukrtransgaz); total import capacity from Ukraine = 1,002 GWh/d:^[8]
  1. at Isaccea (3 international transit points): Isaccea I, II, and III – 642 GWh/d
  2. Isaccea Import (max. 246 GWh/d for Romanian domestic use)
  3. Medieşu Aurit Import – 114 GWh/d for Romanian domestic use

Natural gas imports are realized at 3 different cross-border points (see green circles on pg. 4 map):

	Orlovka (UA)- Isaccea (RO)	Tekovo (UA) -Mediesu Aurit (RO)	Szeged (HU) – Arad (RO)
Diameter	1,000 mm	700 mm	700 mm
Capacity/year	8.6 Bcm	4 Bcm	1.75 Bcm
Pressure	55 bars	70 bars	63 bars
Import direction	from Ukraine	from Ukraine	from Hungary

Source: Transgaz, 2014

Romania’s imports from Ukraine follow a seasonal pattern^[9]:

• During winter: maximum load of 90%; minimum load of 60%.
• During summer: maximum load of 70%; minimum load of 30%.

Natural gas transit

As previously stated, transit takes place via 3 dedicated pipelines (at 54 bars pressure) while the domestic system operates at lower pressure (6-35 bar). Located in Romania’s South-East, in the proximity of the Black Sea Coast (see map on pg. 4), these 3 parallel pipelines are not connected to the NTS, and the transit tariffs are not regulated, but negotiated. The 3 transit pipelines are:

 

• Isaccea I – Negru Vodă I : transit of Russian gas destined for Bulgarian market

Historical base: Agreement for transit of USSR gas to Bulgaria via Romania (November 29, 1970); and the Energy Sector Cooperation Agreement between Bulgaria’s Ministry of Energy Resources and its Romanian counterpart (October 29, 2002).

Pipeline was commissioned in: 1973

Commercial base: Contract no. 10,726 of October 19, 2005 between Transgaz and Bulgargaz EAD.

Contract expiration date: December 31, 2016.

 

• Isaccea II – Negru Vodă II: tranist of Russian gas destined for Turkey, Greece, and other countries

Historical base: Intergovernmental Agreement between Romania and U.S.S.R. for transit via Romania of Russian gas for Turkey, Greece and other countries (December 29, 1986).

Pipeline was commissioned in: 1989.

Commercial base: Contract no. 2102-06 of June 3, 1987, between Transgaz and Gazprom Export.

Contract expiration date: December 31, 2015.

• Isaccea III – Negru Vodă III: contract between Transgaz and Gazprom Export

Historical base: Intergovernmental Agreement between Romania and U.S.S.R. concerning the

increase of the transit pipeline capacity via Romania (October 25, 1996)

Pipeline was commissioned in: 2003

Commercial base: Contract no. 643/00157629/210247 of September 24, 1999

Contract expiration date: December 31, 2023.

 

According to the provision of the EU legislation, Romania has to assure TPA to these 3 pipelines, and the European Commission opened infringement procedures against Romania for non-compliance. Since Romania and Bulgaria are both EU Members, a compromise solution with respect to Isaccea 1 – Negru Vodă 1 line is closer than in the case of the other two lines. In particular, such a solution would consist of: Transgaz and Bulgargaz signing a Capacity Allocation Agreement for the capacity that remains unutilized at Negru Vodă I (1.8 Bcm/year) combined with an exemption request from the applicable EU legislation until 2016, when the contract is due to expire. As regards the other two mainlines, Russia has refused so far (end of 2013) to renegotiate the transit related Agreements concerning line II and III, forcing Romania to unilaterally denounce the IGAs. However, the commercial contracts remain in place until December2015 (line II) and December 2023 (line III) and, under both contracts, the entire transport capacity is reserved for Gazprom Export.

Cross border gas pipeline interconnectors – state of play

• Iaşi-Ungheni (RO-MLD): 1.5 Bcm, completed on the Romanian side, including the sub-crossing underneath Prut river. A GEO adopted in June 2014 amended the Petroleum Law and created the legal basis for Transgaz to take over the operation of this pipeline. Initially, Romania shall export modest volumes that will cover only about 5-10% of Moldova’s annual natural gas consumption needs (1.5 Bcm/year). Moldova has 3.5 million inhabitants and an annual gas consumption of 1.5 Bcm, a quantity currently entirely supplied by Russia. According to Moldova’s Vice Minister of Economy, Tudor Copaci, in order to be able to use the full capacity of the pipeline, the Romanian gas transport network will have to be modernized, effort that is to be supported by EBRD and EIB with some 50-60 million Euros.^[10] The first exports of Romanian gas start on August 27, 2014.
• Giurgiu-Ruse (RO-BU): 1.5 Bcm, scalable up to 3 Bcm; a 25 km long pipeline (8.4 km in Romania and 16.6 km in Bulgaria), with section under the Danube. Stage I (onshore pipeline on the Romanian side and Giurgiu gas metering station) was completed in 2013, but construction work at stage II was delayed for 2014 due to the soil structure which, according to the constructor, slows down drilling. Initially, only 0.5 Bcm/year of capacity shall be available, at the minimum pressure (21 bar). Following the completion of rehabilitation works in the Southern part of Romania’s gas transportation system, Transgaz will be able to ensure a 0.5 Bcm/year transport capacity, at a 30 bar pressure, by the end of September 2014.^[11]
• Arad – Szeged (RO-HU): 1.75 Bcm/year operational capacity, but 4.4 Bcm/year maximum design capacity; operational since 2010, in one direction only (allows imports into Romania); 109 km long. However, it was the intention of both Transgaz and FGSZ to make available 10,000 cm/hour (as certain) and 40,000 cm/hour (as interruptible) from Romania to Hungary, as of February 1, 2014.^[12]
• Proposed pipeline with Serbia: project is in early stage.

Gas storage

Romania’s UGS capacity is underdeveloped, despite the excellent potential (numerous depleted fields). Despite the favorable geological conditions for building a huge storage capacity, total storage capacity in Romania is only about 4 Bcm, with a working capacity of 3 Bcm, representing the combined storage capacity of 8 UGS facilities. All are depleted gas fields, as Romania does not have cavern or aquifer storages.^[13] Of these 8 UGS facilities:

• 6 are owned and operated by Romgaz;
• 2 are owned by SC Depomures SA and Amgaz, but operated by GDF Suez.^[14]

The sites of the 6 Romgaz UGS are: Cetatea de Baltă, Urziceni, Sărmăşel, Gherceşti, Bilciureşti (Butimanu), and Bălăceanca. The other two sites are: Târgu Mureş (the Depomureş one) and Nadeş-Prod-Seleus Sarmatian VII, in Jud. Mureş (the Amgaz one).

Working storage capacity by site

UGS site	Capacity
Bilciureşti	1.3 Bcm
Sărmăşel	0.8 Bcm
Urziceni	0.25 Bcm
Cetatea de Baltă	0.2 Bcm
Gherceşti	0.15 Bcm
Bălăceanca	0.05 Bcm
Târgu Mureş + Nadeş	0.35 Bcm
TOTAL	3.1 Bcm

Sources: Ministry of Economy, Hotnews, 2011

Another UGS, at Roman-Mărgineni, has been in the making for years. The project is closely related to the gas interconnection with neighboring Moldova. Initially, Gazprom showed interest in this UGS project, since one of the topic of the 1996 Convention between Romania and Russia was to increase natural gas deliveries to Romania by opening a third point of import for Russian gas, at Iaşi. The envisioned import direction then was Bălți – Ungheni – Iaşi with a target volume of 2.5 Bcm/year.^[15] A MoU was reportedly signed in 2009 concerning a possible cooperation with Gazprom for several new UGSs with a combined storage capacity of 5-6 Bcm.^[16] But, this cooperation seems to have been conditional on increasing the natural gas volumes that Romania buys from Russia for domestic consumption. Now, in 2014, when Romania is preparing to ship the first gas volumes to Moldova, it is reasonable to assume that the Roman-Mărgineni UGS will be put into use for Republic of Moldova. With an estimated storage capacity of 2 Bcm, Mărgineni is ideally positioned to service the gas supplies to the small neighboring country.

Usually, gas stored in Underground Gas Storages (UGS) facilities is between 1-3 Bcm/month (depending on the month). Within the EU, Romania ranks 9^th in terms of natural gas storage, behind such countries as Germany, Italy, France, Austria, Netherlands, the UK, or neighboring Hungary, but ahead of Slovakia, Poland, Bulgaria, Spain, or Denmark. It is worth pointing that Ukraine’s UGS capacity (31 Bcm) is ten times bigger than that of Romania and higher than that of any other EU country, including Germany (that has 22.7 Bcm)! For exact UGS capacity values for each country, and a full comparison between various MSs, please see table below.

Comparative Data on gas storage in EU Member States, Turkey and Ukraine

(Descending order for maximum storage capacity of EU states, at January 1, 2013)

Ranking	Country	Max. working capacity (Bcm)	Number of gas storage facilities
1	Germany	22.7 Bcm	50
2	Italy	15.6 Bcm	10
3	France	15.5 Bcm	16
4	Austria	7.5 Bcm	7
5	Hungary	6.1 Bcm	5
6	Netherlands	5.1 Bcm	5
7	UK	4.3 Bcm	8
8	Czech Republic	3.5 Bcm	8
9	Romania	3.1 Bcm	8
10	Slovakia	2.9 Bcm	1
11	Spain	2.4 Bcm	4
12	Latvia	2.3 Bcm	1
13	Poland	2.1 Bcm	8
14	Denmark	1.04 Bcm	2
15	Belgium	0.928 Bcm	2
16	Croatia	0.553 bcm	1
17	Bulgaria	0.55 Bcm	1
18	Ireland	0.23 Bcm	1
19	Portugal	0.18 Bcm	3
20	Sweden	0.009 Bcm	1
21	Cyprus	0	0
22	Estonia	0	0
22	Finland	0	0
24	Greece	0	0
25	Lithuania	0	0
26	Luxembourg	0	0
27	Malta	0	0
28	Slovenia	0	0
	TOTAL EU-28	96.6 Bcm	142
	Turkey	2.7 Bcm	1
	Ukraine	31 Bcm	13

Source: Eurogas Statistical Report 2013 and ROEC; ranking by ROEC; numbers are rounded

 

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FOOTNOTES:

1. This Executive Brief includes information presented by Eugenia Gusilov at two different events: the September 24-25, 2013 energy conference in Athens, Greece, and at the inaugural Black Sea Offshore conference in Bucharest, on October 29-31, 2013. ↑
2. Dumitru Chisalita, A History of Romania’s natural gas, AGIR, 2009, pp. 366-368. ↑
3. www.transgaz.ro ↑
4. Ibid. 3. ↑
5. Transgaz Annual Report for 2013, pg. 22. ↑
6. Pipeline for Black Sea gas, Focus Energetic, July 1, 2014: http://www.focus-energetic.ro/conducta-pentru-gazele-din-marea-neagra-18296.html; or Black Sea Gas pipeline will cost EUR 255 Mn, Agerpres, July 1, 2014 : http://www.agerpres.ro/economie/2014/07/01/conducta-care-va-aduce-gazele-din-marea-neagra-va-costa-255-de-milioane-de-euro-14-50-24 ↑
7. www.transgaz.ro ↑
8. The numbers for import capacity from Ukraine into Romania (in Gwh/d) are taken from the Romania-Hungary Market Integration Cost Benefit Analysis Case Study conducted by DNV Kema, July 2013, pg.79 of presentation. ↑
9. Ibid. 5, pg. 80. ↑
10. Romania’s natural gas exports to Moldova start on August 27, Focus Energetic, June 25, 2014: http://www.focus-energetic.ro/din-27-august-incepem-exportul-de-gaze-peste-prut-18129.html ↑
11. Ibid. 3, pg. 16, 46, 58. ↑
12. Ibid. 4, pg. 50. ↑
13. DNV Kema & COWI Belgium, Study on Entry-Exit Regimes in Gas, Part B, Romania Country Factsheet, July 19, 2013, pg. 215. ↑
14. Romgaz presentation by Gheorghe Radu and Valentin Sandu at Romania Oil & Gas conference, December 2012. ↑
15. Ibid. 2, pp. 459. ↑

16. http://economie.hotnews.ro/stiri-energie-5768312-ministerul-economiei-invita-rusia-participe-toate-proiectele-energetice-din-romania-romgaz-gazprom-semnat-primul-memorandum-colaborare-dupa-1989-acordul-este-confidential.htm ↑