Diapozitivul 1

1
TRANSGAZ THE NATIONAL GAS TRANSMISSION COMPANY
FROM ROMANIA
Headquartes Constantin I. Motas Street No 1
551018 Medias City Sibiu County,Romania Tel
40/269/803333 Fax [phone] www.transgaz.ro
2
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

3
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 Poors on March 2007
  and since February 2008 has been rated BBB-
  fact which places Transgaz within the category of
  companies with the investment grade .

4
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.

5
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

• TRANSGAZS MAIN ACTIVITIES
• Domestic gas transmission regulated 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
  pipelines non-regulated activity
• Prices set based on bilateral agreements

6
FINANCIAL OVERVIEW
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
7
ROMANIAN GAS MARKET OVERVIEW
PRODUCTION
TRANSPORTATION
DISTRIBUTION
S.N.G.N. ROMGAZ S.A. 6 bcm
RESIDENTIAL AND DOMESTIC CONSUMERS (POPULATION)
SC. PETROM SA 5,24 bcm
LICENSED AND AUTHORIZED NATURAL GAS DISTRIBUTORS

TRANSGAZ S.A. NATURAL GAS TRANSPORTATION NATIONAL
COMPANY (Transportation system operator)
OTHERS PRODUCERS 1 bcm (areas in concession)
INDUSTRIAL CONSUMERS
NATURAL GAS IMPORT SUPPLIERS 6 bcm
Natural gas flow
Cash flow
Regulated Market
Competitive Market
Competitive Market
8
THE NATIONAL TRANSMISSION SYSTEM (NTS)
GAS CONSUMPTION VERSUS GAS TRANSPORTED (2005-
2007)- BCM
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 -
9
THE INFRASTRUCTURE OF THE NATIONAL NATURAL
GAS TRANSMISSION SYSTEM (NTS)
The NTS transport capacity is around 40 BCM
per yearAround 8,400 km of the networks total
length have useful life of more than 25 years

• 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.

10
TRANSIT ACTIVITY PIPELINES CAPACITIES
TRANSIT CAPACITY (bcm/year)

• 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

11
THE NATIONAL TRANSPORTATION SYSTEM MAP

• Existing
• Interconnections

New Projects
NABUCCO
12
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

13
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
• 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

14
SNTGN TRANSGAZ SAThe National Gas Transmission
Company

• 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

15
Nabucco pipeline project, gas bridge between Asia
and Europe

16
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 7030
• FEED Design 2008-2010
• Expected construction start-up 2010

17
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

18
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, Mures), 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

19
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

20
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

21
SNTGN TRANSGAZ SAThe National Gas Transmission
Company Route of the NABUCCO Pipeline
22
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.

23
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.

24
SNTGN TRANSGAZ SAThe National Gas Transmission
Company

• The Interconnection of the Ukrainian and
  Romanian Gas Transmission Systems
• (The Cernauti Siret Pipeline)
• Main Features
• - Designed capacity 1.5 bcm/year
• - Diameter 600 mm
• - Total length aprox. 30 km

25
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

26
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.

27
SNTGN TRANSGAZ SAThe National Gas Transmission
Company

• Thank you
• for your kind attention !