Romania’s Transgaz jeopardises country’s security of supply ahead of winter – traders

Aura Sabadus


LONDON (ICIS)–Romanian gas transmission system operator Transgaz and energy regulator ANRE may be jeopardising the country’s security of supply this winter if they fail to guarantee import capacity in time, traders told ICIS.

An ICIS investigation has found that in April a high-level EU working group called on regional authorities, including Romania’s Transgaz, to sign interconnection agreements and apply the EU’s network codes at all border points including those between EU member states and contracting parties of the Energy Community.

Furthermore, according to a document seen by ICIS, the Romanian regulator ANRE noted in 2017 that Romania would ensure cross-border capacity would be allocated in line with EU network code mechanisms at its interconnection points with Ukraine, an Energy Community contracting party, once a number of legacy contracts with Russia’s Gazprom expire. This would mean that capacity could be held not only by Russia’s Gazprom but also by Romanian and Ukrainian companies.


Although there is now only three months left until Ukraine’s legacy transit agreement expires, multiple European and Romanian sources point to a catalogue of failures by Transgaz.

Firstly, they note that Transgaz is holding off signing interconnection agreements for its Mediesu Aurit and Isaccea Import interconnection points with Ukraine.

The two points, which are some 700km apart and are thought to have an annual capacity of 4billion cubic metres each, had been merged into a virtual interconnection point. Nevertheless, traders say the two benefit from individual metering stations and could therefore offer distinct physical capacities.

Secondly, sources say, Transgaz has been obstructing third party access and the application of EU rules on Isaccea 1 , another interconnection point with Ukraine where an earlier transit contract expired in 2016.

Thirdly, Transgaz has failed to abide by its own commitments made during an initial agreement with Ukraine in 2016 to commission in June 2019 a brand new metering station at the southern Isaceea cross border point. The completion of the station is now due next year, according to its own ten-year-development-plan (TYNDP) published this month.


In a strongly-worded statement sent to ICIS, the Energy Community said matters had come to a “rather special situation where Ukrtransgaz [the Ukrainian gas transmission system operator], a non-EU transmission system operator, has been busy contacting neighbouring counterparts and looking to sign interconnection agreements, while Transgaz, an EU TSO, has been more and more reluctant to do so.

The Secretariat of the Energy Community, an international organisation set up to extend the EU’s internal free market principles to non-member states added: “This comes as a surprise. […] there should be high interest on both sides of the border to start cross-border trading, especially if we consider that the Romanian regulator indicated in 2017 that network codes would be applied at the Ukrainian […] borders once obligations arising from legacy contracts expire.

“With the end of the Ukraine-Russia transit contract, there are no longer any valid reasons why Romania cannot sign interconnection agreements with Ukraine for the Mediesu Aurit, Isaccea 1, Isaccea Import and start applying network codes from 1 January 2020.

An EU source said the network codes had to be implemented within and between EU member states, but added that implementation at entry and exit points to third countries was not mandatory, being subject to a decision by the relevant regulator.

In the past the implementation process had been typically thwarted by lack of interest from third countries.

However, the Energy Community Secretariat stressed that in this case, a non-EU transmission system operator, Ukrtransgaz, was keener on implementing EU rules than Transgaz, an EU TSO.

“Romania’s reluctance to abide by its commitments highlights the fact that there is a need for the EU to tighten up current legislation so that the flow of natural gas between Energy Community contracting parties and EU member states is carried out in line with the principles of the EU’s Third Energy Package and those of its network codes.”

In a statement to ICIS, the European Network of Transmission System Operators of Gas (ENTSOG), which promotes cross-border gas trading in the EU’s internal market said it was aware of the situation but that it was the duty of national regulators to oversee the application of regulations.

Neither ANRE nor Transgaz replied to questions from ICIS.


Transgaz’s refusal to guarantee cross-border capacity comes at a difficult time for Romania.

The country has been increasing its reliance on gas imports from Hungary, and Russia via Ukraine, since the Socialist Democrat-led government issued an ordinance reversing the liberalisation of the gas market and imposing an import obligation on suppliers.

Because of the regulation Romania, the EU’s third-largest gas producer, has seen its output weaken and imports rise since the beginning of 2019. The country has become a premium gas market , being on average some €9.00/MWh more expensive than western European hubs.

Traders say the situation could worsen this winter, if Romania loses its interconnection capacity with Ukraine, particularly at a time when its cross-border capacities with Hungary and Bulgaria are already very limited.

Romania had been using its Ukrainian interconnection points to import Russian gas and data provided by Ukrtransgaz show that the Tekovo-Mediesu Aurit interconnector has been mainly used during the peak winter season. Average send-out during the 2018-19 winter stood at 3 million cubic metres (mcm)/day.

With the expiry of the transit contract, the capacity at the Mediesu Aurit and Isaccea Import could be made available under the EU’s network codes, which means that it could be auctioned off according to an ENTSOG calendar.

“At the moment, we still don’t know whether this capacity is going to be tendered on the regional [capacity auction] RBP platform for Romanian and Ukrainian companies, whether it’s going to be offered on a first-come-first-served basis, as has so far been the case, or whether it’s going to be offered at all,” a trader said.

Another trader said Transgaz may be looking to fall back on stored gas and possibly resort to load shedding, asking large consumers to ramp down consumption if demand spikes.

However, a third trader said: “What sort of measure would that be when the entire region is awash with gas?”


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