ANNUAL REPORT OF âTRANSGAZâ MANAGEMENT INDIVIDUAL ...

SNTGN “TRANSGAZ” SA Medias Annual Management Report for 2007 

NATIONAL GAS TRANSMISSION COMPANY 

“TRANSGAZ” S.A Medias 

ANNUAL REPORT OF “TRANSGAZ” MANAGEMENT 

INDIVIDUAL FINANCIAL STATEMENTS 

-2007- 

(AUDITED FINANCIAL STATEMENTS) 

Page 1 of 54


CONTENTS 

REPORT AND ISSUER IDENTIFICATION DATA......................................................................... 

BACKGROUND DATA ON THE ISSUER …………..........……………………………………... 

EXECUTIVE SUMMARY……..…………………………………………………………………... 

CH.1 - ANALYSIS ON COMPANY’S ACTIVITY…………………………….. 

1.1.a) Main activities….…………...................................................................................... 

1.1.b) Transgaz’ incorporation date............................................................................................. 

1.1.c) Key merger or restructuring of Transgaz during the financial year ….. 

1.1.d) Asset acquisition and transfer......................................................................................... 

1.1.e) Assessment of the company’s activity……………………………................................... 

1.1.1. General assessment features………………………………………………….............. 

1.1.2. Assessment of Transgaz technical level....................................................................... 

1.1.3. Assessment of the supply activity …………………………………………………... 

1.1.4. Assessment of the trading activity……………………………………………………. 

1.1.5. Assessment of company’s employee/ personnel related issues......................................... 

1.1.6. Assessment of the environmental impact of Transgaz’ main 

activities....................................................................................................... 

1.1.6.1. Synthetic presentation on the environmental impact of Transgaz’ main activity ……... 

1.1.6.2. Main actions, measures for environmental management improvement and prevention and/or 

mitigation of the environmental impact for 2007............................. 

1.1.6.3. Level of compliance with the environmental protection legislation ………… 

1.1.6.4. Fines, accidental occurences and disputes.......................................................................... 

1.1.7 Prospects on Transgaz’ activity....................................................... 

CH. 2 TRANSGAZ TANGIBLE ASSETS………………………………………… 

2.1 Location and features of Transgaz main output capacities............ 

2.2 Description and analysis of the property wear-out extent.............................................. 

2.2.1. Description and analysis.................................................................................... 

2.2.2. Achievement of the maintenance programme ………………………………............. 

2.2.3. Investment programme………………………………………………………………….. 

CH.3. THE MARKET OF THE SECURITIES ISSUED BY TRANSGAZ............................... 

3.1. Features and evolution of the securities issued by Transgaz on the regulated market managed by 

the Bucharest Stock Exchange..................................................................... 

3.2. Description of Transgaz policy on dividends................................................................. 

3.3. Description of any company’s actions for purchasing its own shares……………………..… 

3.4. In case of subsidiaries, specify the number and the nominal value of the shares issued by the 

parent company and held by the subsidiaries................................. 

3.5. If the company issued bonds and/or other receivables, specify the manner of discharging the 

company’s obligations towards the bearers of such securities………..... 

CH.4. COMPANY’S MANAGEMENT………………………….……………………………. 

4.1. Introduction of administrators………………………………………………………….……. 

4.2. Members of Executive Management……………..…………………………….............. 

CH.5. ACCOUNTING FINANCIAL STANDING…….……..…………………….............. 

5.1. Comparative analysis of the economic-financial standing within the last 3 years............................. 

5.1.1. Balance sheet items…………………………………………………………………. 

5.1.2. Profit and loss account................................................................................................ 

5.1.3. Cash-flow……………………………………………………………………………….. 

5.2. Financial risk management………………………………………………………... 

CH.6. MISCELLANEOUS………………………………………………………………………………... 

ANNEXES TO CH.4 item 4.1.a)………………………………………………………………………... 

Page 2 of 54


REPORT AND ISSUER IDENTIFICATION DATA 

Annual Report under Article 227 of Law no.297/2004 

For the financial year ended on December 31 st , 2007 

Report date: April 4 th , 2007 

Name of company: SNTGN TRANSGAZ SA 

Registered office: Medias, no.1, Constantin I. Motas Sq., code: 551130 

Phone/fax no.: 0269-803333/0269-839029 

Unique registration code under the Commercial Register Office: 13068733 

Tag number in the Commercial Register: J32/301/2000 

Subscribed and paid-up share capital: lei 117,738,440 

Regulated market for the issued security transactions: Bucharest Stock Exchange 

Main characteristics of the securities issued by Transgaz: 1,177,384 ordinary, 

registered, unseverable and freely-transactional shares as of January 24 th , 2008, having 

a nominal value of lei 10 /share. 

BACKGROUND DATA ON THE ISSUER 

The National Gas Transmission Company, “TRANSGAZ” SA (Transgaz), performs 

activities in the following locations: 

• Transgaz headquarters: Medias, no. 1, C.I. Motas Sq., Sibiu county, code 

551130; 

• Operating Division: Medias, no.11, George Enescu St., Sibiu county, code 

551018; 

• Research, Engineering and Regulation Division: Medias, no.6, Unirii St., Sibiu 

County, code 550173; 

• Bucharest Gas Dispatching Centre: Bucharest, no.30, Calea Dorobanti, sector 1, 

code 010573. 

Transgaz holds 10 regional operating centres, void of legal personality: 

1. Arad Regional Operating Centre, no.56, Poetului St., Arad, Arad County, code 

310369; 

2. Bacău Regional Operating Centre, no. 63, George Bacovia St., Bacău, Bacău 


3. Brăila Regional Operating Centre, no.5, Ioan Ghica St., Brăila, Brăila County, 

code 810089; 

4. Brasov Regional Operating Centre, no.12, Grigore Ureche St. A, Brasov, 

Brasov county, code 500449; 

5. Bucuresti Regional Operating Centre, no. 2-4, Lacul Ursului St., sector 6, 

Bucharest, code 060594; 

6. Cluj Regional Operating Centre, no.12, Crisului St., Cluj-Napoca, Cluj County, 

code 400597; 

Page 3 of 54


7. Craiova Regional Operating Centre, no. 35, Arhitect Ioan Mincu St., Craiova, 

Dolj County, code 200011; 

8. Medias Regional Operating Centre, no. 29, George Cosbuc St., Medias, Sibiu 


9. Constanta Regional Operating Centre, no. 2 bis, Caraiman St., Constanta, 

Constanta County, code 900117; 

10. Constanta Regional Transit Operating Centre, no. 2 bis, Caraiman St., 

Constanta, Constanta County, code 900117. 

The mission of TRANSGAZ is represented by: the operation of the National Gas 

Transmission System under safety and economic efficiency conditions, the NTS 

rehabilitation, upgrading and development on the main consumption directions; the 

NTS interconnection with the neighbouring gas transmission systems; the 

development of international gas transit projects, the implementation of a participative 

management in all TRANSGAZ fields of actions; the development of corporate 

culture and professional achievements; the implementation of gas sector regulations; 

the improvement of the gas transmission activity informatisation and the elaboration of 

bills and actions to support such bills. 

EXECUTIVE SUMMARY 

TRANSGAZ performance ratios 

Tag 

no. 

Ratio MU 2005 2006 2007 

Variation 

% 

2006/2005 

Variation 

% 

2007/2006 

1 Turnover mil. lei 770.12 909.02 1,038.87 118.04 114.28 

2 Operating revenue mil. lei 787.77 941.20 1,051.66 119.48 111.74 

3 Operating expenses mil. lei 589.76 675.88 780.37 114.60 115.46 

4 Gross operating profit mil. lei 198.01 265.32 271.29 133.99 102.25 

5 Gross financial profit mil. lei -22.95 20.97 -1.96 - - 

6 Tax on profit mil. lei 36.61 48.38 45.32 132.15 93.68 

7 Net profit mil. lei 138.45 237.91 224.01 171.84 94.16 

8 Gross dividend/share lei 6.88 11.69 9.66* 171.63 83.03 

* Dividend proposal 2007 

The evolution of the gas amounts circulated and conveyed through the national gas 

transmission system (NTS) as well as of the technological consumption, under 

development during 2005-2007, is illustrated below: 

Page 4 of 54


20,000.00 

18,000.00 

16,000.00 

14,000.00 

12,000.00 

Thousand 

cm 

10,000.00 

8,000.00 

6,000.00 

4,000.00 

2,000.00 

0.00 

2005 2006 2007 

Transmitted gas 

Circulated gas 

Technological consumption 

Tag 

no. 

Ratio MU 2005 2006 2007 

1 Transmitted gas mil cm 16,447.07 15,237.34 14,546.58 

2 Circulated gas mil cm 18,140.04 18,313.92 17,029.52 

3 Technological consumption mil cm 399.19 388.54 329.72 

4 Technological consumption/circulated gas 

share 

% 2.20 2.12 1.94 

Within the period under analysis, i.e. during 2005-2007, the gas amount transmitted 

through the NTS registered a downfall due to a decrease in demand on the Romanian 

gas market. 

The evolution of the performance ratios for the main services performed by the 

company on the gas market is as illustrated in the table below: 

Tag 

no. 

Achievements 

Specifications 

2005 2006 2007 

Dynamics (%) 

0 1 2 3 4 5=3/2 6=4/3 7=4/2 

1. Revenues from 

transmission 

- thousand cm 16,447,067 15,237,343 14,546,575 92.64 95.47 88.44 

- lei 510,193,093 620,810,631 735,133,766 121.68 118.42 144.09 

- lei/1000 cm 31.02 40.74 50.54 131.34 124.04 162.91 

2. Revenues from transit 

- lei 219,545,884 212,666,684 190,267,099 96.87 89.47 86.66 

3. Revenues from gas 

deliveries 

- thousand cm 60,182 86,949 156,764 144.48 180.29 260.48 

- lei 36,835,658 71,623,279 110,296,420 194.44 154.00 299.43 

- lei/1000 cm 612.07 823.74 703.58 134.58 85.41 114.95 

4. Other operating 

revenues 

- lei 21,192,860 36,099,371 15,959,401 170.34 44.21 75.31 

5. TOTAL OPERATING 

REVENUES 

787,767,495 941,199,965 1,051,656,687 119.48 111.74 133.50 

The increase in revenues from the gas transmission activity was determined based on 

the annual adjustment of the transmission tariffs, mainly influenced by the achieved 

and commissioned investments, as well as by the progress of inflation. 

Page 5 of 54


The decrease in revenues from the international gas transit was triggered by the 

evolution of the USD and EURO exchange rate, as the equivalent value of the transit 

services is in currency. 

Page 6 of 54


CH.1 – ANALYSIS ON THE COMPANY’S ACTIVITY 

1.1.a). Main activities 

Transgaz is a joint-stock company operating under the Romanian laws and under the 

Incorporation Document. 

According to GD no. 334/2000 and Transgaz’ Incorporation Document, the company’s 

objective is to achieve the national strategy established for gas transmission, 

international transit, dispatching and research-design in the field of gas transmission 

by means of trading deeds compliant with its scope of activity and in line with the 

national legislation. 

Transgaz’ main scope of activity - CAEN code 6030 - “Gas transmission through 

pipelines” - consists of gas transmission, international transit, dispatching and 

research-design in the field of gas transmission. On the other hand, Transgaz may 

complementary perform other related/ancillary activities supportive of its main scope 

of activity, according to the legislation in effect and the company’s Incorporation 

Document (Article 6). 

In accordance with the regulatory framework applicable to the gas sector, Transgaz 

performs gas transmission activities based on: specific sector legislation, amended 

Concession Agreement approved by GD no. 668/2002, gas transmission licence no. 

40/17.01.2001, gas transit licence no. 41/17.01.2001 and authorization no. 

829/20.09.2007 for the gas transmission system/site operation, granted by Decision no. 

1398/2007 issued by the National Energy Regulatory Authority (ANRE). 

The gas transmission activity is deemed as public service of national interest, as it is 

included in the regulated segment of the gas domestic market. The gas transmission 

services are provided, under natural monopoly conditions, based on tariffs determined 

by ANRE. The contracts on transmission services are concluded for a gas year, based 

on the framework contracts drawn up and approved by ANRE. 

1.1.b). Transgaz’ incorporation date 

Transgaz was established in 2000, following the restructuring of the former SNGN 

“Romgaz” SA, under GD no. 334/April 28 th , 2000, published in the Romanian Official 

Journal, Part I, no. 194/May 4 th , 2000. 

SNGN “Romgaz” SA was restructured and reorganized, by division, based on GD no. 

334/2000; the company was dissoluted and its main gas sector activities were 

unbundled and organized into distinct activities. 

Following such restructuring, Transgaz became the technical operator of the NTS, 

responsible for its operation under quality, safety, economic efficiency and 

environmental conditions. 

1.1.c). Key merger or restructuring of Transgaz during the financial year 

According to Decision no. 9/July 26 th , 2007 of the General Assembly of the 

Shareholders, Transgaz underwent restructuring, by accounting unbundling of the gas 

transmission regulated activities pursuant to Article 101(1) of Gas Law no. 351/2004, 

further amended and supplemented. For the purpose of implementing the restructuring 

Page 7 of 54


process, the above-mentioned Decision approved the dissolution of the Gas 

Transmission Subsidiary, Medias, of the Subsidiary for Research and Design in the 

field of Gas Transmission, and of the 9 Regional Transmission Offices of the 

Company. The former Regional Transmission Offices turned into Regional Operating 

Centres standing for secondary head offices (operating centres) of the Company: Arad 

Regional Operating Centre, Braila Regional Operating Centre, Brasov Regional 

Operating Centre, Bacau Regional Operating Centre, Bucharest Regional Operating 

Centre, Cluj Regional Operating Centre, Medias Regional Operating Centre, Craiova 

Regional Operating Centre, and Constanta Regional Operating Centre. Such abovementioned 

Decision (9/2007) also approved the incorporation of the Regional Transit 

Operating Centre, headquartered in Constanta. The unbundling pattern applied by 

Transgaz was previously agreed by ANRE. 

1.1.d). Asset acquisition and transfer 

Except for the assets commissioned based on the acquisition programme meant to 

develop the national transmission system, and for the assets decommissioned 

according to law, the company did not perform any other such operations in 2007. 

1.1.e). Assessment of the company’s activity 

Transgaz developed a public internal audit at the end of 2007, by the establishment of 

the Internal Audit Department which is to ensure the implementation of the first 

internal audit plan during 2008. 

The financial statements for 2007 shall be audited by “PriceWaterhouse Coopers” 

(PWC) by the first half of April. 

The financial statements ending on June 30 th , 2007 were audited by PWC and the audit 

report was included in Transgaz’ IPO prospectus approved by the Romanian National 

Securities Commission, in September 2007. 

1.1.1. General assessment features 

The economic-financial activity carried out by Transgaz, within 2005-2007, was based 

on the ratios included in the annual revenue and expense budgets approved by 

governmental decision. 

The key economic-financial ratios achieved during 2005-2007 are illustrated below: 

Tag 

no. 

Ratio MU 2005 2006 2007 

1 Turnover lei 770,115,066 909,017,487 1,038,866,794 

2 Total revenues lei 800,729,114 982,295,999 1,064,236,983 

3 Total expenses lei 625,671,377 696,005,832 794,906,765 

4 Gross profit lei 175,057,737 286,290,167 269,330,218 

Page 8 of 54


1,200.00 

1,000.00 

thousand lei 

800.00 

600.00 

400.00 

Total revenues 

Total expenses 

200.00 

0.00 

2005 2006 2007 

Total revenues 800.73 982.30 1,064.24 

Total expenses 625.67 696.01 794.91 

The total revenues scored an increase over the analysed period, mainly due to: 

The adjustment of the regulated tariffs for the gas transmission services; 

The increase in the revenues from delivery of import gas received from the Russian 

Federation in consideration for international gas transit services. 

The total expenses incurred were compliant to the extent provided in the revenue and 

expense budget. The raise of such expenses was mostly caused by: 

The increase in the volume of works for the NTS rehabilitation and maintenance in 

order to ensure its operation under safety conditions; 

The change of the royalty share for the concession of the national transmission 

system from 5% to 10% of the revenues from gas transmission and international 

gas transit activities; 

The increase in personnel expenses (salaries, contributions to salary related funds, 

profit sharing of the salary earners) in compliance with GEO no. 79/2001, 

respectively the correlation of salary accruals with the labour output growth. 

The gross profit is lower by 5.92%, as compared to the achievements of 2006, due to 

the fact that revenues for 2007 increased by 8.34%, and expenses by 14.21%. Such 

lower profit was influenced by the approval and application of new regulated 

transmission tariffs, with a 3 months’ delay (starting with October 1 st , 2007 instead of 

July, 1 st 2007), as a consequence of the failure to establish in due time the regulated 

rate of return on capital (RoR) for the second regulatory period (July 1 st , 2007 – June 

30 th , 2012). We hereby specify that the regulated revenue not achieved in the last 

quarter of 2007 shall be recovered by the transmission tariff adjusted as of July 1 st , 

2008, according to the methodology approved by ANRE. 

Page 9 of 54


The synthesis of the financial results on December 31 st , 2007 as compared to the 

revenue and expense budget is illustrated in the table below: 

*thousand lei* 

Tag 

REB Achieved Ratios 

Name 

no. 

2007 2007 (%) 

0 1 2 3 4=3/2x100 

1. Operating revenues 1,048,330.44 1,051,656.69 100.32 

2. Financial revenues 12,053.98 12,580.30 104.37 

3. TOTAL REVENUES 1,060,384.42 1,064,236.98 100.36 

4. Operating expenses 800,410.87 780,369.56 97.50 

5. Financial expenses 12,106.07 14,537.20 120.08 

6. TOTAL EXPENSES 812,516.94 794,906.76 97.83 

7. GROSS RESULT, of which: 247,867.48 269,330.22 108.66 

from operation 247,919.57 271,287.13 109.43 

from financial activities -52.09 -1,956.91 

8. Tax on profit 39,997.14 45,323.76 113.32 

9. NET PROFIT 207,870.34 224,006.45 107.76 

The total revenues corresponding to 100.36% as opposed to the provisions of the 

REB, incur an excess of lei 3,852.57 thousand. 

The total expenses incurred at the end of the financial year, of 97.83%, as opposed to 

the approved forecast, were by lei 17,610.18 thousand lower than as provided in the 

Revenue and Expense Budget. 

The gross profit was achieved 108.66% compared to the forecast, by lei 21,462.74 

thousand higher than as provided in the REB. The tax on profit, of 113.32%, 

increased by lei 5,326.62 thousand, and the net profit, of 107.76%, was by lei 

16,136.12 thousand higher than forecasted. 

The steady increase in tax on profit compared with the increase in profit is due to the 

influence of undeductible expenses (provisions for slow paying customers, rights 

granted upon retirement, constituted on December 31 st , 2007, social expenses 

exceeding the legal deductibility limit, granted under the collective labour contract). 

The topping of the estimated profit was triggered by the following factors: 

savings in expenses – a favourable influence of lei 17,610.18 thousand; 

revenue exceeding - a favourable influence of lei 3,852.56 thousand. 

Transgaz achievements within the analysed period are reflected in the evolution of the 

following ratios: 

Page 10 of 54


Tag 

no. 

1. Profitability ratio 

a) EBITDA in total sales 

b) EBITDA in own capital 

c) Rate of gross profit 

d) Rate of return on capital 

2. Liquidity ratios 

a) Current liquidity ratios 

b) Quick liquidity ratio 

3. Risk ratios 

a) Leverage ratio 

b) Interest coverage rate 

4. Activity ratios 

a) speed of debit - customers 

b) speed of credit - suppliers 

Ratio Calculation formula 2005 2006 2007 

EBITDA 

Turnover 

EBITDA 

Own capital 

Gross profit 

Turnover 

Net profit 

Own capital 

Floating assets 

Short term liabilities 

Floating assets - Stocks 


Loan capital 

Own capital 

EBIT 

Interest expenses 

32.99% 40.95% 34.17% 

24.58% 31.07% 22.65% 

22.73% 31.49% 25.93% 

13.40% 19.85% 14.30% 

0.89 0.95 1.84 

0.75 0.82 1.74 

0.18 0.11 0.08 

11.72 20.45 23.08 

Customer average balance x 

365 days 115.60 99.95 91.85 

Turnover 

Supplier average balance x365 

days 50.47 50.01 39.33 

Turnover 

Evolution of profitability ratios 

The profitability ratios indicate the efficiency of a company’s activity, i.e. the 

company’s ability to gain profit of the resources available each year. 

60.00% 

40.00% 

20.00% 

0.00% 

2005 2006 2007 

EBITDA/turnover 32.99% 40.95% 34.17% 

EBITDA/own capital 24.58% 31.07% 22.65% 

Gross profit/turnover 22.73% 31.49% 25.93% 

Net profit /own capital 13.40% 19.85% 14.30% 

Page 11 of 54


Evolution of liquidity ratios 

The liquidity ratios show the available floating capital, as well as the likelihood of the 

latter to quickly turn into liquidity for current debt settlement. Over the entire period 

under analysis, such ratios fall between the optimum range of 0.65 – 1. The steady 

growth of such ratios, registered on December 31 st , 2007, was due to the sum gained 

from sales of shares, following share capital increase under GD no.1329/2004, 

amended by GD no. 708/2005, amounting to lei 261,065.64 thousand. 

2.00 

1.50 

1.00 

0.50 

0.00 

2005 2006 2007 

Current liquidity 0.89 0.95 1.84 

Quick liquidity 0.75 0.82 1.74 

Risk ratios 

The risk ratios reflect the extent in which the company deals with payment liabilities, 

the company’s maximum leverage capacity, emphasizing the proportion between longterm 

loans and the aggregated funds advanced by the company into the economic 

circulation. The calculated risk ratios are within the normal accepted limits. 

25.00 

20.00 

15.00 

10.00 

5.00 

0.00 

2005 2006 2007 

Loan capital 

18.03 10.85 7.79 

/ Own capital 

Interest coverage rate 11.72 20.45 23.08 

Page 12 of 54


Management ratios 

Such ratios provide information on the company’s cash-in flow or cash-out flow and 

the company’s ability to control the working capital and its basic trading activities. 

The conclusion is that over the period under analysis the receivables recovery time and 

the debt reimbursement time shortened. 

150.00 

100.00 

50.00 

0.00 

Receivables turnover 

- days 

Payables turnover 

- days 

2005 2006 2007 

115.60 99.95 91.85 

50.47 50.01 39.33 

1.1.2. Assessment of Transgaz technical level 

During 2007, Transgaz performed activities based on the economic-financial ratios 

provided in the Revenue and Expense Budget approved by Order no. 2128/November 

20 th , 2007 of the Ministry of Economy and Finance. 

Transgaz’ main activity, i.e. gas transmission through the National Transmission 

System, is a natural monopoly and thus a regulated activity performed under the 

operation licence and under the other regulations of the ANRE. 

The tariffs for the transmission services are regulated and determined based on orders 

of ANRE. The table below illustrates the transmission tariffs over the assessed period: 

Tariff of the transmission services 

Tag 

no. 

1. 

2. 

3. 

4. 

Order of the regulatory 

authority 

Order of ANRGN 

73/14.06.2004 


63/09.06.2005 


35/08.06.2006 

Order of ANRE 

33/18.09.2007 

Term of 

application 

Volume 

component 

(lei/1000 cm) 

Firm services 

capacity booking 

component 

(lei/1000 

cm/hour) 

Interruptible 

services 

capacity booking 

component 

(lei/1000 

cm/hour) 

July 1 st , 

2004 11.55 9.67 - 

July 1 st , 

2005 16.04 9.67 - 

July 1 st , 

2006 25.35 9.67 9.14 

Oct. 1 st , 

2007 37.28 10.97 9.17 

Page 13 of 54


The charts below illustrate the share of the main activities in Transgaz’ revenues: 

2005 

2006 

5% 3% 

Revenues from 

transmission 

8% 

Revenues from 

transmission 

28% 

Revenues from 

transit 

23% 

Revenues from 

transit 

64% 

Revenues from 

gas deliveries 

Other operating 

revenues 

65% 

Revenues from 



revenues 

2007 

10% 2% Revenues from 

transmission 

18% 

Revenues 

from transit t 

Revenues from 


70% 


revenues 

Gas transmission services 

Transgaz’ main activity is gas transmission through the national transmission system, 

an activity constituting a public service of national interest performed by operation of 

a strategically important infrastructure. 

During 2007 the transmission activity was executed both under the transmission, 

dispatching and supply licences and under the relevant regulations issued by ANRE. 

As a transmission operator, Transgaz is responsible for: 

- ensuring the physical balance of the NTS; 

- NTS maintenance, rehabilitation, upgrading and development under safety, 

efficiency and environmental conditions; 

- ensuring third party nondiscriminatory acces to the NTS. 

The transmission services consist of activities and operations related to transmission 

capacity booking and gas transmission through the NTS. Gas transmission is ensured 

from the NTS-entry commercial delivery/taking over points to the NTS-exit 

commercial delivery/taking over points. Transgaz has liability for the gas necessary to 

cover loss within the NTS. 

In 2007, the total gas amount of 329,717.746 thousand cm, necessary for the coverage 

of such loss and for Transgaz’ own technological consumption was purchased from 

SNGN Romgaz SA. 

The key beneficiaries of the gas transmission services provided by Transgaz by means 

of the National Transmission System are as follows: 

Page 14 of 54


- licensed distribution and supply companies, with a share of 52.45% in the 

transmission services for 2007; 

- licensed gas supply companies, with a share of 21.65% in the transmission 

services for 2007; 

- eligible consumers, with a share of 25,90% in the transmission services for 

2007; 

The following chart shows the key beneficiaries of the transmission services provided 

by Transgaz in 2007: 

9.55% 

2.19% 

2.71% 

4.16% 

14.27% 

4.39% 

6.02% 

27.19% 

23.27% 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

1.Distrigaz Sud 

2.E.ON Gaz Romania 

3.Petrom Gas 

4.Interagro 

5.Petrom SA 

6.Electrocentrale Bucharest 

7.Azomures 

8.Termoelectrica Bucharest 

9.Electrocentrale Galati 

10.Others 

6.25% 

1.1.3. Assessment of the supply activity 

The technical and material supplies necessary for the safe operation of the NTS are 

mainly domestically sourced, i.e.: valves, fittings, spare parts, fuel, and other essential 

materials for quick interventions or emergency works. The ethil-mercapthane used for 

gas odoration is imported. 

Due to the fact that acquisitions are based on ferm contracts, concluded as a result of 

bidding procedures selected under GEO no. 34/2006, the safety of the supply sources 

is secured by contract clauses. 

1.1.4. Assessment of the sales activity 

a) In 2007, Transgaz traded gas on the competitive market, representing the equivalent 

value of the interstate transmission services (transit), of 156,763.846 thousand cm, 

under temperatures of 15 0 C and amounting to lei 703.58/1000 cm. 

On December 31 st , 2007 such activity ceased as a consequence of the change in means 

of payment within the transit contracts concluded with Gazprom Export. 

b) The gas transmission activity performed by Transgaz involves over 90% of the gas 

consumed in Romania, therefore it is deemed that: 

- there is no such case as competitiveness in the field; 

- it does not significantly depend upon a client or group of clients within its 

portfolio 

Page 15 of 54


1.1.5. Assessment of employee/personnel related issues 

On December 31 st , 2007 Transgaz had 5,000 people hired on individual employment 

contracts. 

Within 2005-2007 the number of the company’s personnel evolved according to the 

following table: 

2005 2006 2007 

Number of employees at the start of the period 4,797 4,870 4,963 

Number of newly employed persons 190 189 125 

Number of persons ceasing labour relationships 

with the company 

117 96 88 

Number of employees at the end of the period 4,870 4,963 5,000 

The evolution of the personnel structure on categories of studies, rendered in the 

following table, proves the importance attached to the growth in the level of 

employees’ professional training, simultaneously with the company’s interest in 

covering the need for personnel by having highly qualified specialists employed. 

31.12.2005 31.12.2006 31.12.2007 

TOTAL employees, of which: 4,870 4,963 5,000 

University graduates 647 695 858 

High-school graduates 1,549 1,789 1,606 

Technical school graduates 883 908 1,068 

Middle school graduates + training course 1,791 1,571 1,468 

Page 16 of 54


Personnel structure according to categories of studies 

1,800 

1,600 

1,400 

1,200 

1,000 

No. 

of 

800 

employees. 

600 

400 

University graduates 

High-school graduates 

Technical school graduates 

Middle school graduates 

+ training course 

200 

0 

2005 2006 2007 

Year 

On December 31 st , 2007, the trade union membership represented 98.42% of the total 

number of employees (5,000), i.e 4,921. There are 4 trade unions representing 

Transgaz employees: 

• Gas Transmission Trade Union Medias; 

• SNTGN TRANSGAZ SA Medias Free Trade Union; 

• “CERTEH” Medias Research Technology Trade Union; 

• “Metan” Medias Professional Trade Union. 

The relations between the manager and the personnel are regulated by the Collective 

Labour Contract, at company’s level, and by the individual labour contracts of the 

company’s employees. 

The collective labour contract, at the company’s level, concluded between Transgaz 

and its personnel represented by the four trade unions, provides for individual and 

collective labour relations and also for the parties’ rights and obligations on: 

• conclusion, execution, amendment, suspension and termination of individual 

labour contracts 

• labour, labour safety and health conditions 

• professional training 

• work and rest time 

• salaries 

• service rights and obligations, labour discipline 

• employees’ social protection 

• other rights and obligations resulted from work relations 

• mutual acknowledgements, employer’s and unions’ rights and obligations 

Page 17 of 54


The relations between the company’s manager and employees are in line with the legal 

provisions in effect. No conflicts occurred therein during 2007. 

1.1.6. Assessment on the environmental impact of Transgaz’ main activity 

The implementation of an Environmental Management System (EMS) in Transgaz, 

based on the requirements of the International Standard ISO 14001/2005 and certified 

by the Romanian Quality Insurance Company in 2006, provided the organizational 

framework necessary for rendering practical the company’s environmental 

management policy. 

Such certification was internationally acknowledged by Deed RO-0529 issued by The 

International Certification Network. Transgaz gained certification ISO 14001 for all its 

activities and sites and is ranged among the great Romanian companies reaching such 

essential goal. 

During the 1 st and 2 nd supervisory audits performed by SRAC, the environmental 

management system was re-certified according to Standard 14001/2005. The external 

audits proved the EMS to operate in compliance with ISO 14001 and to continuously 

improve its operation. 

In 2007, Transgaz re-updated its environmental policy statement and made it known to 

all its personnel, to the public and to other interested parties. 

The objectives of the environmental policy aim at maintaining an efficient 

environmental management system in compliance with the legal and regulatory 

requirements, at preventing pollution and reducing waste and resource consumption. 

Such environmental objectives are mainly focused on obtaining environmental permits 

or re-updating thereof, obtaining Water Management licenses for crossings and undercrossings, 

ranging sound emissions within acceptable limits, improving gas odoration 

systems, efficiency and control of such odoration process, reducing air and earth 

pollution by ethyl-mercaptane, monitoring pollution sources, assessing site 

environmental issues and reducing methane emissions. 

Reaching the above-mentioned objectives depends upon practical actions provided in 

annual environmental management programmes. 

1.1.6.1. Synthetic presentation on the environmental impact of Transgaz’ main 

activity 

The National Gas Transmission System consists of pipelines together with the 

equipment related thereto. The features of the technological processes, the complexity 

of activities and their degree of dangerousness, the spread on the entire country’s 

territory and this sector’s specific corporate culture stand for key issues related to the 

environmental impact of Transgaz’ main activity. 

The territorial arrangement of the National Gas Transmission System ensures a 

permanent contact and interrelation with the environment, including with the 

economic and social sector. 

Under normal NTS operating conditions, no contaminants should be discharged in the 

air. There could appear potentially polluting accidental emissions in case of faulty 

operations, damages or upon execution of various construction and maintenance 

works. 

Page 18 of 54


The environmental issues on Transgaz’ sites, identified under normal, accidental 

and/or emergency operating conditions, were determined for such cases having a 

tremendous impact on the environment. All significantly impacting environmental 

issues were taken into account in the determination of preventive and corrective 

actions, correlated with environmental objectives and goals included in environmental 

management programmes. 

1.1.6.2. The key actions and measures for improving the environmental 

management and/or mitigating the impact on the environment in 2007 

In order to improve activity in such field, various actions were taken in 2007, as 

follows: 

- ensuring the familiarity with and the observation of the environmental 

legislation by all the company’s employees 

- notifying authorities and the public of the environmental policy by any means 

- monitoring of environmental factors (air, water, noise) according to the 

requirements of the environmental permits 

- identification of environmental issues on sites and activities 

- elaboration of studies for mitigating phonic pollution 

- modernization/upgrading works to equipment preventing pollution and 

mitigating the negative impact on the environment at national level 

- acquisition of absorbents for treatment of land affected by accidental spillage of 

oil products from aggregates 

- conclusion of contracts on waste taking over from the regional operating 

centres 

1.1.6.3. The level of compliance with the legislation on environmental protection 

Under Order no. 876/2004 of the Ministry of Environment and Water Management on 

the approval of the "Procedure for the licensing of activities having a crucial impact on 

the environment", respectively Order no 1798/2007 of the Ministry of Environment 

and of Development on the approval of the "Procedure for the issuance of 

environmental licenses", the gas transmission activity, 6030 CAEN code, shall be 

performed exclusively based on environmental license. 

Again, under Order no. 860/2002 of the Ministry of Waters and Environmental 

Protection on the "Procedure for assessing the impact on the environment and for the 

issuance of the environmental agreement", it is necessary to be granted an 

environmental agreement in order to be able to start building or mounting works to 

new or current sites which involve the change in specifications or capacity. 

On the other hand, under Water Law no. 107/1996 and Order no. 662/2006 of the 

Ministry of Environment and of Water Management, Transgaz shall commence works 

only after having been granted such water management permits. Therefore, Transgaz 

holds 114 water management permits for all hydrographical basins and water 

crossings. 

In order to be granted environmental and water management licenses, Transgaz had 

studies and documentation elaborated pursuant to legal requirements. 

Page 19 of 54


In 2007, the total number of sites to be licensed was 508, of which on December 31 st , 

2007, 461 held licenses, and as regards the rest of 47, the necessary documentation for 

the annual licensing/re-licensing was submitted to the relevant regional authorities 

according to the due date and methodology. 

Consequently, there is 100% compliance in what the licensing procedure for 

environmental protection is concerned. 

The dynamics of the annual licenses for the last three years is graphically illustrated 

below: 

No. of licenses 

ANNUAL GROWTH OF THE NUMBER OF ENVIRONMENTAL LICENSES 

600 

495 

495 

508 

461 

500 

398 

400 

339 

300 

155 

200 

100 

97 

47 

0 

2005 2006 2007 

Year 

Total objectives Licensed objectives Objectives to be licensed 

1.1.6.4. Fines, accidental occurrences and disputes 

In 2007, no fines had to be paid to the environmental protection control authorities, i.e. 

The National Environment Guard. 

Transgaz was not involved in any environmental disputes. 

Due to the permanent supervision of equipment, the personnel being rendered aware of 

consequences, the compliance with labour instructions and the relatively normal 

weather conditions, no accidental occurrences affecting the environment were 

recorded in 2007. 

1.1.7. Prospects on Transgaz’ activity 

Within the context of Romania’s adhesion to the EU and for the purpose of 

implementing strategic objectives essential for Transgaz’ turning into a European 

company, the monopoly position of a NTS operator has to be reinforced and Transgaz 

has to assert importance at a regional level, by active participation in all European 

organizations and in projects of regional or European interest and by fruitful 

partnerships with companies in the field. 

The more and more numerous international organizations playing an extremely 

important role in gathering together all energy market players in order to identify the 

key directions towards the creation of a sole domestic European market. 

As of 2003 Transgaz is a member of GIE (Gas Infrastructure Europe), which is an 

association of the European gas infrastructure operators. Such affiliation proved 

beneficial for our company from the point of view of the access to information on the 

Page 20 of 54


concerns of the European gas transmission operators’ and specifically on the ongoing 

regulatory projects of the European institutions. 

In view of extending Transgaz’ activities within the organization, the following shall 

be highlighted: 

- more serious involvement by participation in other work groups as well 

(besides the study group for the SEE Energy Community) 

- organization of the annual association conference in Bucharest, in the 3 rd 

trimester of 2008 together with GIE Secretariat (the most important event for 

the European infrastructure operators). 

Great importance shall be attached to the monitoring of the activities performed by 

other organizations in the field, such as IGU (International Gas Union), ECE ONU 

Gas Centre, Balkan and Black Sea Gas Association and others. According to the 

results of such monitoring process and as deemed appropriate, the company’s joining 

such organizations shall be considered. 

Transgaz’ main co-operation directions generally aim at achieving new 

interconnections with the neighbouring gas transmission systems under mutually 

profitable commercial conditions and at participating in major European energy 

projects. 

To this effect, the following shall be taken into consideration: 

- the strengthening of co-operation relationships with Bulgargaz Holding, 

Bulgaria in view of completing the interconnection project in the direction 

Russe-Giurgiu and in other directions 

- the setting of other contacts with Serbia in order to carry out an interconnection 

which could possibly lead to the development of the transit on the Romanian 

territory (given the fact that Serbia imports gas from the Russian Federation and 

that gas transit to Serbia is done on the Hungarian territory), turning Serbia into 

a potential client for gas to be transmitted through the Nabucco pipeline 

- the participation in the actions which were the basis of MOL’s (Hungaria) 

initiative to kick-off a joint project with Geoplin (Slovenia), Bulgargaz 

(Bulgaria), Plinacro (Croatia), Serbjagas (Serbia) and BH – Gas (Bosnia & 

Herzegovina) for the purpose of developing a regional transmission system (the 

NETS Project). The NETS Project aims at improving the gas supply to South- 

Eastern Europe and proves beneficial for all parties involved and is based on an 

equal-right partnership. The dialogues between operators are in full progress 

- the carrying on of the tight co-operation with GAZPROM as regards gas transit 

to Bulgaria, Turkey, Greece and Macedonia. A possible direction for the 

improvement of such relationship would be to extend the transit capacity or to 

jointly develop new transmission/transit directions (for instance to Serbia) 

- the establishment of contacts with key equipment suppliers in the European and 

world gas industry and of a data base supporting the development of Transgaz’ 

future investment projects. 

Transgaz intends to approach the role, structure and functions of the National 

Transmission System in order to ensure a flexible conduct as required by free markets, 

in line with the European requirements on the safety of gas supply. 

Page 21 of 54


To this effect, there are certain objectives: 

- construction of new gas transmission corridors between the interconnection 

points. Such goal shall be achieved by the current pipeline system development 

or by building new pipelines in other directions 

- building of underground gas storage facilities, other than such facilities meant 

to balance the NTS and to supply gas to consumers for the purpose of 

increasing the safety of the gas transmission within the context of an 

interconnected transmission system. 

Page 22 of 54


CH. 2. TRANSGAZ’ CORPORATE ASSETS 

2.1 Location and features of Transgaz’ key output capacities 

Transgaz’ main scope of activity is gas transmission. 

The gas transmission activity embodies public services of national interest. The 

operated infrastructure is of strategic importance and belongs to the state public 

domain. Such activity is performed based on an operating license issued by ANRE. 

The major components of the national gas transmission system are as follows: 

Name of NTS objective/component 

Units 

(km, no) 

Main gas transmission pipelines and gas supply joints 13,110 

Operating Gas Metering and Regulating Stations (MRS) 961 

Valve Control Stations (VCS, TN) 21 

Import Gas Metering Stations (GMS) 2 

Metering stations located on the gas transit pipelines (GMS) 6 

Gas Compressor Stations (GCS) 6 

Cathodic Protection Stations (CPS) 857 

Gas Odoration Stations (GOS) 575 

The National Gas Transmission System covers the entire country’s territory in a radialcircular 

structure briefly described below: 

The NTS is operated by means of nine regional operating centres consisting of 53 

sectors. From a technological point of view, the NTS comprises 9 regional gas 

transmission sub-systems. 

Page 23 of 54


2.2 Description and analysis of the property wear-out extent 

2.2.1. Description and analysis 

Transgaz operates state-owned public domain assets which are not depreciated under 

GD no. 213/1998, except for investments made of own sources in assets subject to 

concession agreements. The writing off of expenses by investments made of own 

sources in state-owned public assets is calculated over the remaining normal duration 

of use or over the validity period of the concession agreement pursuant to the Fiscal 

Code. 

The tangible fixed assets which are not part of the state public domain are subject to 

depreciation under Law no. 15/1994 and have the following normal durations of use: 

Assets categories Service life (years) 

Buildings and special equipment 40-60 

Aggregates and equipment 15-40 

Metering and control devices 7-12 

Vehicles 5-8 

Other tangible assets 3-5 

The table below analyses the key objectives of the NTS from the point of view of the 

service life: 

Service life 

Gas 

transmission 

pipelines (km) 

Supply joints (km ) 

Metering regulating 

stations (no.) 

> 40 years 4,500 218 109 

Between 30 and 40 

years 


years 


years 

2,963 225 65 

1,944 236 74 

762 311 289 

< 10 years 1,187 764 424 

TOTAL 

11,356 1,754 

13,110 961 

The conclusion is that, out of 13,110 km of gas transmission pipelines, approximately 

80% have a long service life, close to their normal service life. The performed 

diagnoses underline high levels of tubular material defects, generally caused by 

damages to the coating which is also confirmed by the increase in the power 

consumption of the cathodic protection stations. 

The gas delivery to distributions and end users is ensured by the 961 metering and 

regulating stations partly consisting of physically and morally worn-out equipment 

which is impossible to integrate into a Supervisory Control and Data Acquisition 

System (SCADA). Gas metering within such equipment is usually done by lowperformance 

metering systems sometimes leading to biases. The active protection of 

the pipelines is provided by cathodic protection stations commissioned simultaneously 

Page 24 of 54


with the pipelines and having worn-out equipment generating higher power 

consumption. 

The compressor capacity is provided by 6 gas compressor stations located on the main 

transmission directions. Such compressor stations are endowed with equipment and 

installations manufactured in the 70s, physically and morally worn-out and usually 

unlikely to reach the performance required by the transmission parameters. 

The gas dispatching within the NTS is done by operations, in the interconnection 

nodes of the main pipelines. Such nodes are provided with manually actuated 

operation valves and parameter surveillance equipment, most of them being worn-out 

from the point of view of performance and safety of operation. 

Gas odorisation is generally carried out by “evaporation-type” centralized systems 

failing to ensure continuous and controlled odorization which could cause under- or 

over-odorization and implicitly increased odorant consumption. 

One should notice that although the tangible asset base is rather old, the real technical 

conditions of the NTS are properly maintained as a result of accurate maintenance, 

rehabilitation and modernization programmes (current repair works and overhauls). 

Such programmes were focused on finding state-of-the-art solutions for the choice of 

proper technologies and equipment and provided the fact that such 

maintenance/modernization/upgrading works would last for a long period because of 

the high value of works. 

2.2.2. Achievement of the maintenance programme 

The asset management applied to the gas transmission activity is a component of the 

NTS strategy and aims at ensuring quality gas transmission services under the 

European standards and within acceptable risk limits. 

The NTS capacity maintenance activity, coordinated as to ensure the level of 

performance required for providing maximum operability with minimum costs, is to be 

considered within this context. Developed based on the Maintenance Provision 

Programme, such activity was structured on 2 chapters: “Maintenance works” and 

“Maintenance services”. 

The total value of the Maintenace Programme for 2007 was of lei 83,225,001 

integrally covered by own sources. This programme included the kick-off of the 

Transmission “0” System, by the implementation of a pipeline rehabilitation 

programme in the main consumption directions, so that it could operate at 40 bar. 

The maintenance programme consisting of the above-mentioned chapters, the 

directions of action according to objectives and services and their percentage share are 

all shown in the following table: 

Page 25 of 54


Chapter A. Maintenance works 

Estimated value 

(lei) (%) 

Repair works to the main pipelines 61,422,674 80.09 

Rehabilitation of the Gas Metering-Regulating Stations, of the 

Technological Nodes and of the Gas Metering Stations 

Repair works to special buildings related to Gas Metering-Regulating 

Stations and Valve Control Stations 

9,102,504 11.87 

120,000 0.16 

Repair works to cathodic protection stations 1,900,000 2.48 

Repair works to buildings 4.000.000 5.22 

Works for environmental protection 100,000 0.13 

Repair and maintenance works to stations 50,000 0.07 

TOTAL WORKS 76,695,178 100.00 

Chapter B. Maintenance services 

Repair works to gas compressor units 550,000 8.42 

Repair works to special buildings and technological equipment related to 

Gas Metering-Regulating Stations and Valve Control Stations 

Repair works to machines, service equipment, metering and control 

devices and other services 

745,000 11.41 

735,000 11.26 

Repair works to gas metering systems 300,000 4.59 

Means of transport 1,500,000 22.97 

Survey and project services 1,500,000 22.97 

Pipeline diagnosis services 1,000,000 15.31 

Diagnosis services to unpigable pipelines 10,000 0.01 

Gas quality and environmental services 49,823 0.76 

Fire Fighting and Prevention Services 100,000 1.53 

Nondestructive welding control services 30,000 0.46 

Pipeline cleaning special operations 10,000 0.01 

TOTAL SERVICES 6,529,823 100.00 

TOTAL MAINTENANCE PROGRAMME 83,225,001 

The achievement of the maintenance programme for 2007 is synthetically illustrated 

below: 

*lei* 

Forecasted 

Achieved 

Third parties Own sources Total 

Maintenance works 76 ,695,178 71,823,176 10,597,106 82,489,891 

Maintenance services 6,529,823 4,737,529 2,332,080 7,069,609 

TOTAL 83,225,001 76,560,705 12,929,186 89,489,891 

The chapter “Maintenance works” provides for equipment replacing activities and 

inspections performed during off-peak periods (warm season) in order to cover gas 

consumption peaks (cold season). 

The services performed under the maintenance programme were primarily meant to 

support service activities for the entire equipment of the NTS and to maintain nominal 

transmission capacities by provision and implementation of modern cleaning 

technologies. 

Page 26 of 54


Consequently, the elaboration and completion of the maintenance programme focused 

on boosting the efficiency of the repair works, on reasonably using the allocated funds 

and on correlating with Transgaz’ investment programme. 

The deadlines for completion of works, as provided in contracts, were generally 

observed. Delays thereto were objectively justified (unfavourable weather conditions, 

priority of other works, etc.) without endangering gas transmission capacity, over peak 

periods. 

The maintenance works were supervised by all Transgaz’ departments involved, in 

close co-operation with the contracted constructors and service providers specified in 

the maintenance programme. 

2.2.3. Investment programme 

The scientific and engineering research activity, in the field of gas transmission, 

playing an important role in the Romanian medium and long-term Energy Strategy, is 

mainly directed at NTS development, rehabilitation, modernization and safety increase 

by: 

building of new transmission pipelines, high pressure joints and meteringregulating 

stations necessary for the gas supply to new distributions; 

construction of land equipment and transmission pipelines related to underground 

gas storage facilities; 

modernization of gas metering systems and equipment; 

development of new compressor capacities and upgrading of the current 

compressor stations; 

modernization of technological nodes; 

modernization and automation of the cathodic protection stations; 

gas odorisation; 

implementation of new processes and technologies; 

environmental protection, labour security and health. 

According to the programme data of the Romanian medium-term Energy Strategy (up 

to 2013), the scientific and engineering research activity within the Research, 

Engineering and Regulation Department shall be focused on great complexity strategic 

works: 

• construction, on the Romanian territory, of transit capacities integrated into the 

Caspian-Western Europe gas transmission corridor (Nabucco project); 

• completion of the Szeged (Hungaria) - Arad (Romania) pipeline; 

• Negru Vodă IV Import Gas Station; 

• Romania - Ukraine (Siret region) interconnection pipeline; 

• rehabilitation of the DN 1000 mm Isaccea - Negru Vodă transit pipeline. 

Page 27 of 54


Currently, the engineering activity covers approximately 70% of the total design works 

provided in the investment development-modernisation programme and in the NTS 

maintenance programme. 

The engineering activity is intended to cover approximately 80% of the total design 

works necessary for the development of the NTS up to 2009, and to reach 90% in 

2011. 

In order to achieve such objectives and to extend and improve the research and 

engineering activities, the following actions shall be taken: 

increase in the number of qualified personnel by attracting highly professional 

specialists; 

qualification of the personnel by training courses; 

carrying on the professional certification of researchers and designers; 

endowment of the Research, Engineering and Regulation Department with technical 

and scientific means. 

The total value of the investment expenses for the period under analysis according to 

the approved Revenue and Expense Budget was of lei 188,659.12 thousand, and the 

achieved value was of lei 200,849.99 thousand, also including the amount of lei 

43,204.33 thousand related to the NTS connection equipment according to the 

regulation on the access to the NTS approved by GD no. 1043/2004. 

On December 31 st , 2007 the investment expenses were as follows: 

*thousand lei * 

Forecasted Achieved 

‣ Total investment, of which: 188,659.12 200,849.99 

• Connection equipment according to the regulation on 

the access to the NTS 43,204.33 

‣ Investment loan reimbursement 51,825.61 48,415.95 

TOTAL 240,484.73 249,265.93 

The financing sources for investment expenses were as follows: 

*thousand lei * 

Forecasted Realizat 

‣ Net profit appropriated for own financing 95,980.53 107,489.51 

‣ Depreciation 73,904.20 73,448.10 

‣ Bank loans: 70,600.00 52,950.00 

‣ NTS connection tariff 43,204.33 

TOTAL 240,484.73 277,091.94 

The key completed and accepted objectives for the NTS development and 

modernization in 2007, were as follows: 

- Filiasi - Strehaia - Dobeta Turnu Severin gas transmission pipeline; 

- transmission pipeline for gas supply to Giurgiu; 

- Căpâlna – Stei gas transmission pipeline; 

- Modernisation of the Isaccea II – Import Gas Metering Station; 

Page 28 of 54


- transmission pipeline for gas supply to Fetesti; 

- Corbu Valve Control Station; 

- Onesti Compressor Station; 

- Băcia Technological Node; 

- Coroi Technological Node. 

The growth of investment expenses during 2005-2007 and their financing sources 

were as follows: 

*thousand 

lei* 

SPECIFICATIONS 2005 2006 2007 

Total investment expenses, of which: 292,909 228,053 249,266 

Investments 242,782 176,870 200,850 

Reimbursement of loan installments 50,127 51,183 48,416 

Total investment sources, of which: 292,909 228,053 277,092 

Own sources,of which: 273,688 202,163 224,142 

- net profit to be appropriated for own financing sources 67,039 116,522 107,490 

- asset depreciation 62,650 70,119 73,448 

-dividends associated to 2003 and 2004, withheld for 

financing investment under GEO no. 137/2004 96,423 15,522 

- own sources from the previous years 47,576 

- other sources 43,204 

Bank Loans 19,221 25,890 52,950 

Page 29 of 54


CH. 3. THE MARKET OF THE SECURITIES ISSUED BY TRANSGAZ 

Transgaz is the second state-owned company of the utility sector. In order to achieve 

the strategic objectives specified in the governmental programme “A Strong Market” – 

“Capital Market Development”, Transgaz promoted a primary initial public offering 

for sales of stock, i.e. 10% of the increased share capital, as provided by GD 

no.1329/2004 on the proxy of the involved public institution and on the approval of 

the public offering privatization strategy of companies included in the portfolio of the 

Ministry of Economy and Commerce, amended by GD no. 708/2005. 

In the context of the capital market development, the listing of the sole Romanian gas 

transmission operator on the Bucharest Stock Exchange proved to be a strategic 

decision, of great importance both for the company’s prospects and for stock exchange 

capitalization increase. 

The company’s being traded on the regulated market managed by the Bucharest Stock 

Exchange is an acknowledgement of its efficiency, significance and role played in the 

domestic and international business environment and also an additional safe sorce for 

the financing of the investment programmes and for the company’s development. 

The IPO developed during November 26 th , 2007 - December 7 th , 2007 was endorsed 

by the Romanian National Securities Commission under Decision no. 2199/14.11.2007 

and Decision no. 2266/21.12.2007 and was executed pursuant to the capital market 

legislation. 

The IPO turned into a great success for the Romanian capital market from the 

following points of view: 

IPO with the highest value of the offering exposed for sale; 

IPO with the heaviest stock demand of Romania; 

The first IPO in Romania, with a new financial instrument attached thereto, i.e. the 

so-called “allocation rights”. 

3.1. Features and growth of the securities issued by Transgaz on the regulated 

market managed by the Bucharest Stock Exchange 

Given the fact that such event has set a record in the company’s history, the IPO 

balance sheet illustrates data and information related to the securities issued by the 

company, as follows: 

• Transgaz’ IPO was the first IPO in the history of Bucharest Stock Exchange to 

trade allocation rights, thus allowing investors to trade such rights prior to the start 

of the actual share transactions, the conversion ratio being 1 right to 1 share; 

• The number of shares exposed for sale through Public Offering was of 1,177,384 

shares, standing for 10% of the increased share capital; 

• Price of shares: lei 191.92 /share; 

• Total value of the shares exposed for sale: lei 225,963,537.28 ~ Є 65 million; 

• Subscription period: November 26 th , 2007 – December 7 th , 2007; 

• Subscription tranches: high subscription tranch - 60% of the offering- any 

subscription of over lei 500,000 and low subscription tranch - 40% of the 

Page 30 of 54


offering – any subscription between lei 2,112.12 (equivalent of 11 shares) and lei 

500,000; 

• Allocation method: pro-rata according to the extent of oversubscription; 

• Intermediary: Raiffeisen Capital & Investment Bucharest; 

• Distribution group: Raiffeisen Capital & Investment Bucharest; Intercapital 

Invest; Raiffeisen Bank; 

• The offering is deemed successful as upon the date of closing thereof, 

minimum 90% of the shares were subscribed; 

• Transaction date: December 11 th , 2007; 

• Settlement date: December 14 th , 2007; (beginning of the period for restituting the 

oversubscribed amounts with no shares allocated thereto, period ending on 

December 19 th , 2008); 

• Destination of funds from offering: financing support for the investment 

programme for 2008; 

• Outcome of subscription: the total offering was oversubscribed approximately 

28 times, of which the low tranch was oversubscribed 11.3277 times, the high 

tranch being oversubscribed 38.9796 times; 

• Value of the IPO subscription: lei 6.4 billion approx. euro 1.8 billion; 

• Total number of subscriptions: 12,089 of which: 96% to the low tranch and 4% 

to the high tranch; 

• Listing: - allocation rights: Bucharest Stock Exchange, Rights Section, 3 rd 

category; 

- stocks: Bucharest Stock Exchange, Stocks Section, 1 st category; 

• The “Fondul Proprietatea SA” (The Ownership Fund) shareholder exercised its 

preference right proportionally with the interest in the share capital, i.e. for 

207,572 shares integrally subscribed to a price discounted by 1% as opposed to 

the offering price, settled as a lock-up for 6 months subsequently to the stock 

listing on the Stock Exchange; 

• The trading of 1,384,956 allocation rights started on December 19 th , 2007 and 

ended on December 21 st , 2007 upon closing of the Stock Exchange activity to be 

resumed in January 2008; 

• The allocation rights were transactioned under TGNRO1 symbol; 

• The allocation rights were registered with the National Securities Commission by 

security registration certificate no. 3368/14.12.2007, thus Transgaz turned into a 

publicly-owned company; 

• The share capital of SNTGN Transgaz SA increased by lei 13,849,560 following 

IPO process, i.e. from lei 103,888,880 to lei 117,738,440 according to the Mention 

Registration Certificate no. 51657/27.12.2007, issued by the Commercial Register 

Sibiu; 

Page 31 of 54


• Following the IPO, Transgaz’ shareholding structure and interest in the share 

capital changed as follows: 

- The Ministry of Economy and Finance 75%; 

- SC Fondul Proprietatea SA Bucharest (The Ownership Fund) 15%; 

- Other shareholders, natural and legal persons (free-float) 10%. 

Transgaz’ share capital consists of 11,773,844 ordinary, dematerialized, indivisible, 

registered shares, freely tradeable as of the date of admission to trading on the 

regulated market managed by the Bucharest Stock Exchange, with a nominal value of 

lei 10/share, integrally paid upon issuance date. Each share grants the holder a voting 

right under the relevant legislation. 

At the end of 2007, Transgaz’ shareholding structure consisted of 10,300 

shareholders. 

The shareholders’ register was held by the company until September 19 th , 2007 and 

after such date it was held by the SC Depozitarul Central SA according to the contract 

concluded with the latter. 

Progress of allocation rights trading 

Regulated market 

Sector 

Category 

Symbol 

ISIN Code 

Bucharest Stock Exchange 

Stocks 

3 - rights 

TGNRO1 

ROTGNTRGH010 

The 1 st trading day of the allocation rights attached to the securities issued by 

Transgaz, within the Bucharest Stock Exchange, closed under the price of lei 

294.80/share, which meant an increase by 53.6% compared to the public offering 

issuance price. 

The last trading day of 2007 closed under the price of lei 335/share, that is a more 

substantial increase, by 74.55%, as opposed to the issuance price. 

Given the fact that the trading of allocation rights started on December 19 th , 2007 and 

that there were only three trading days in 2007, from the point of view of the stock 

exchange liquidity of the allocation rights attached to Transgaz’ shares, on December 

31 st , 2007, the case was as follows: 

Total value of transactions - lei 82,415,789 

Daily average value of transactions – 27,471,930 

lei 

Total value of transactions – number 4,465 

Traded average volume - number 1,488 

Transgaz had never effected any transactions of own shares until the end of 2007, as it 

had not held any shares by then. 

Page 32 of 54


According to the relevant regulations, as regards operations for acquisition or selling 

of securities issued by a company admitted for trading on the regulated market which 

cause the voting rights held by a person to reach, go beyond or fall behind 5%, 10%, 

20%, 33%, 50%, 75%, or 90% of the total voting rights, such person shall 

simultaneously notify, within maximum 3 working days from the date of acquiring 

knowledge of such operation, the company, the National Securities Commission and 

the regulated market where the relevant securities are traded. 

Transgaz did not get any notice to this effect in 2007. 

Growth of the prices for TGNRO1 allocation rights 

350.000 

340.000 

330.000 

320.000 

310.000 

300.000 

290.000 

280.000 

270.000 

260.000 

250.000 

Price 

19.12.2007 20.12.2007 21.12.2007 Trading day 

Opening price Mimum price Maximum price Closing price 

In order to facilitate dialogue with shareholders, potential investors, financial analysts 

and investment consultants, Transgaz used electronic communication means, i.e. the e- 

mail. 

The company’s web page is under reconstruction so that all shareholders should 

benefit from equal, politically correct and transparent treatment and access to data on 

the company’s activity. 

3.2. Description of Transgaz’ policy on dividends 

The appropriation of the company’s net accounting profit is done according to GEO 

no. 64/2001 on the profit appropriation within national companies with capital 

integrally or partially owned by the state, in the following directions: 

‣ Legal reserves; 

‣ Covering of accounting loss on the previous years; 

‣ Other appropriations under law; 

‣ Up to 10% for the employees’ share in profits, but no more than an average 

salary at the company’s level, multiplied by the average number of personnel 

recorded for 2007; 

Page 33 of 54


‣ dividends of minimum 50% for shareholders; 

‣ other reserves representing own financing sources. 

The company registers and pays dividends appropriated from the net profit, only 

following approval of the annual financial statements within the general meeting of the 

shareholders. 

Account of dividends appropriated from the net profit, during 2005-2007: 

2005 2006 2007 (proposal) 

Appropriated dividends (lei) 71,388,676 121,384,642 113,735,333 

3.3. Transgaz’ intention to purchase own shares 

Transgaz has no intention to purchase own shares. 

3.4. Number and nominal value of the shares issued by the parent company and 

held by subsidiaries 

There are no subsidiaries in Transgaz’ organizational structure. 

3.5. Bonds and/or other receivables 

Transgaz did not issue any bonds or other receivables within the assessed period. 

Page 34 of 54


CH.4. COMPANY’S MANAGEMENT 

4.1. Introduction of administrators 

List of company’s administrators in 2007: 

1. MUNTEAN FLORIN NICOLAE - 01.01.2007-21.05.2007; 

2. SCHMIDT VICTOR ALEXANDRU - 01.01.2007-27.03.2007, chairman of the 

Board of Administration; 

3. APAN IOANA - 01.01.2007- 27.03.2007; 

4. SIMESCU NICOLAIE - 01.01.2007- including now; 

5. IANDA ELENA - 01.01.2007-including now; 

6. COSMEANU STEFAN - 27.03.2007-21.05.2007, chairman of the Board of 

Administration; 

7. ZIDARU CONSTANTIN - 27.03.2007 - including now; 

8. TURDEAN NICOLAE - 27.03.2003 (appointed as member of the Board of 

Administration) from 21.05.2007 - including now - chairman of the Board of 

Administration; 

9. LOGHIN GHEORGHE - 21.05.2007- 23.07.2007; 

10. RUSU IOAN - 21.05.2007 - including now. 

4.1.a). Administrators’ CVs 

The CVs of the following current administrators shall be attached hereto: 

a) Turdean Nicolae 

b) Ianda Elena 

c) Rusu Ioan 

d) Simescu Nicolaie 

e) Zidaru Constantin. 

4.1.b). Agreements/arrangements or special family relationships 

Pursuant to the data provided by the above-mentioned members of the executive 

management: 

There is no arrangement or family relationship between such person and a third 

party due to whom such person was appointed as member of the executive 

management; 

No member of the executive management was convicted of frauds committed 

within the last five years; 

There are no procedures regarding such person’s capacity to execute 

responsibilities. 

Page 35 of 54


4.1.c). Share of the Administrators in Transgaz’ capital 

The table below illustrates the account of shares held by the company’s administrators: 

Tag 

No. of shares held on Interest in the 

Administrators 

no. 

07.01.2008 company’s capital (%) 

1. Turdean Nicolae - - 

2. Ianda Elena - - 

3. Zidaru Constantin 230 0.00195 

4. Simescu Nicolaie 9 0.000076 

5. Rusu Ioan 2508 0.02130 

4.1.d). List of persons affiliated to the company 

1. NABUCCO GAS PIPELINE INTERNATIONAL, headquartered in Viena, is a 

company where Transgaz has interest of 20%. The scope of activity of Nabucco Gas 

Pipeline International is the development of the “Nabucco” project; 

2. SC MEBIS SA Bistrita, headquartered in Bistrita, is a company where Transgaz has 

interest of 17.47%. Such company’s scope of activity is the manufacture of metal 

framework and complex welded assemblies and hydraulic products. 

4.2. Members of the executive management 

The following persons are members of the executive management: 

Tag 

no. 

Name and surname Position Division/Direction 

1. Pavloschi Vlad Director Research, Engineering and Regulation 

Division 

2. Lata Ilie Director Maintenance Division 

3. Chetan Ioan Director Operating Division 

4. Pintican Liviu Director Gas Transit Division 

5. Tomos Ioan Director Development Division 

6. Moldovan Radu Director Economic Division 

7. Rosu Elena Director Legal Direction 

8. Mohan Aurel Director Environment and Labour Quality, Safety 

and Health Direction 

9. Stefanescu Ioan Director Strategy, Organization and International 

Co-operation Direction 

10. Chis Ioan Director Human Resource Direction 

11. Deac Dorin Director Informatics Technology Direction 

12. Florea Vasile Director Regulation Direction 

13. Patarniche Mihai Director Maintenance - Operation Direction 

14. Stroia Gheorghe Marius Director Bucharest Gas Dispatching Centre 

15. Cosma Emil Florin Director National Gas Dispatching Centre 

16. Tataru Ion Director Works Execution Direction 

17. Mates Angela Director Accounting Direction 

18. Marin Dumitru Director Budget - Finance Direction 

Page 36 of 54


The members of the executive management have individual labour contracts 

concluded for undetermined duration. 

Both the managing and the execution personnel within Transgaz might be appointed, 

employed and displaced by the Director General. 

4.2.c). Members of Transgaz’ executive management, including regional offices 

and number of shares held 

Tag 

no. 

Name and surname 

Position/Division/ 

Direction 

No. of 

shares on 

07.01.08 

Interest 

share (%) 

1. Rosu Elena Director / Legal Direction - - 

2. Chis Ioan Director / Human Resource Direction - - 

3. Mohan Aurel 

Director / Environment and Labour Quality, 

Safety and Health Direction 

17 0.00014 

4. Stefănescu Ioan Director / Strategy, Organisation Direction 106 0.00090 

5. Deac Dorin Vasile Director /Informatics Technology 17 0.00014 

6. Pavlovschi Vlad 

Director/ Research, Engineering and 

Regulation Department 

230 0.00195 

7. Novac Mircea Chief Engineer/ Designing - - 

8. Florea Vasile Vladimir Director / Regulation Direction - - 

9. Fodor Iuliu Chief Engineer / Research - - 

10. Lata Ilie Director / Operating Division 46 0.00039 

11. Patârniche Mihai Director / Maintenance-Operation Direction 97 0.00082 

12. Moldovan Gheorghe Chief Engineer / Gas Compression - - 

13. Chetan Ioan Director / Operating Division - - 

14. Stroia Gh. Marius Director / Bucharest Gas Dispatching Centre - - 

15. Cosma Emil Florin Director / National Dispatching Centre - - 

16. 

Pintican Juga Liviu 

Traian 

Director / Gas Transit Division - - 

17. Tomos Ioan Tudor Director / Development Division 41 0.00035 

18. Tătaru Ion Director / Works Execution Direction 25 0.00021 

19. Medesan Vasile Chief Engineer / Works Execution Direction - - 

20. Moldovan Radu Costică Director / Economic Division 5,481 0.04655 

21. Mates Angela Director / Accounting Direction 229 0.00194 

22. Marin Dumitru Director / Budget-Finance Direction 1,817 0.01543 

23. Gherghe Dumitru Doru Director / Constanta Transit Regional Office - - 

24. Păunescu Farida 

Chief accountant/ Constanta Transit 

Regional Office 

- - 

25. Polosan Zaharie Director / Medias Regional Office - - 

26. Bucur Adrian Chief Engineer / Medias Regional Office - - 

27. Popa Amalia Daniela Chief accountant/ Medias Regional Office - - 

28. Andrei Romeo Director / Constanta Regional Office - - 

29. Buneci Doina Chief accountant/ Constanta Regional Office - - 

30. Tandrău Marcel Director / Cluj Regional Office - - 

31. Călburean Ioan Chief engineer/ Cluj Regional Office - - 

32. Negrea Felicia Contabil Sef / Cluj Regional Office - - 

33. Bacila Ioan Nicolae Director / Arad Regional Office - - 

34. Bachios Gheorghe Chief engineer/ Arad Regional Office - - 

35. Condrea Maria Chief accountant/ Arad Regional Office - - 

36. Cristolovean Gheorghe Director / Brasov Regional Office 230 0.00195 

37. Popescu Florin Chief engineer/ Brasov Regional Office - - 

38. Vatavu Ioan Chief accountant/ Brasov Regional Office - - 

39. Baldea Dan Iulian Director / Bucharest Regional Office - - 

40. Bărbulescu Paul Chief engineer/ Bucharest Regional Office - - 

41. Bandol Elisabeta Chief accountant/ Bucharest Regional Office - - 

42. 

Dimitriu Alexandru- 

Florentin 

Director / Bacău Regional Office - - 

43. Bucătaru Aurel Chief engineer/ Bacău Regional Office 27 0.00023 

Page 37 of 54


44. Frunceac Liliana Chief accountant/ Bacău Regional Office - - 

45. Nită Viorel Director / Craiova Regional Office 5 0.00004 

46. Fratostiteanu Angelo Chief engineer/ Craiova Regional Office - - 

47. Stancu Mihaela Chief accountant/ Craiova Regional Office - - 

48. Moraru Mihai Director / Brăila Regional Office - - 

49. Gurgu Victorel Chief engineer/ Brăila Regional Office - - 

50. Parisescu Nelida Chief accountant/ Brăila Regional Office - - 

51. Dropol Mircea Consultant 50 0.00042 

Page 38 of 54


CH.5. FINANCIAL ACCOUNTING STATEMENT 

5.1. Comparative analysis of the economic financial statement within the last 3 

years 

5.1.1. Balance sheet items 

The account of the balance sheet items for 2005-2007 is as follows: 

Name of ratio 

31.12.2005 31.12.2006 31.12.2007 

lei lei lei 

Dynamics (%) 

0 1 2 3 4=2/1 5=3/2 6=3/1 

Intangible assets 500,986,340 501,897,730 497,865,672 100.18 99.20 99.38 

Tangible assets 1,288,739,302 1,404,088,759 1,536,914,804 108.95 109.46 119.26 

Financial assets 808,381 180,645 939,496 22.35 520.08 116.22 

Fixed assets 1,790,534,023 1,906,167,134 2,035,719,972 106.46 106.80 113.69 

Stocks 42,237,920 36,851,972 31,320,289 87.25 84.99 74.15 

Receivables 149,085,505 162,230,392 175,780 ,842 108.82 108.35 117.91 

Short term financial 

investments 

0 0 0 0.00 0.00 0.00 

Cash and bank accounts 66,193,524 79,265,886 366,618,710 119.75 462.52 553.86 

Floating assets -TOTAL 257,516,949 278,348,250 573,719,841 108.09 206.12 222.79 

Expenses in advance 567,109 644,525 866,461 113.65 134.43 152.79 

Liabilities to be paid 

within one year 

287,876,885 294,222,446 311,163,974 102.20 105.76 108.09 

Floating assets, 

respectively net current -32,387,334 -17,195,515 259,097,372 53.09 x x 

liabilities 

Total assets minus net 

1,742,251,027 

current liabilities 

1,839,827,945 2,294,817,344 105.60 124.73 131.39 

Liabilities to be paid 680,100,839 623,935,301 608,662,481 91.74 97.55 89.50 

within more than a year 

Provisions 28,596,986 17,592,891 27,173,940 61.52 154.46 95.02 

Revenues in advance 18,490,169 51,109,518 96,373,889 276.41 188.56 521.22 

Capital and reserves 

Subscribed and paid-up 

103,803,200 103,830,370 117,738,440 100.03 113.39 

capital 

113.42 

Capital premium 0 0 251,933,300 

Reserves from reassesment 

84.68 

116,100,786 106,277,055 98,309,305 91.54 92.50 

Reserves 652,741,912 760,861,431 888,133,215 116.56 116.73 136.06 

Reported outcome 160,907,304 -10,576,196 -10,407,110 x 98.40 x 

Outcome of the financial 

138,447,085 237,912,527 224,006,454 171.84 94.15 

year 

161.80 

Profit appropriation 138,447,085 5,434 2,781,614 

Own capital 1,033,553,202 1,198,299,753 1,566,931,990 115.94 130.76 151.61 

Public assets 0 0 0 

Total capital 1,033,553,202 1,198,299,753 1,566,931,990 115.94 130.76 151.61 

Intangible assets 

Under the Pipeline Concession Agreement approved by GD no.668/20.06.2002 and 

under Order no. 1752/2005 of the Ministry of Finance, amended by Order no. 

2374/2007 of the Ministry of Economy and Finance, the public domain pipelines were 

registered with intangible assets. 

Page 39 of 54


In the progress of 2007, following annual inventory and suggestions made by the 

company to the National Agency for Mineral Resources, the transfer of pipelines from 

the state public domain to the state private domain, amounting to lei 7,218,785.69 and 

reflected in the decrease in intangible assets as opposed to 2006 was approved by GD 

no. 1523/12.12.2007. 

Following the initial public offering process, the value of the intangible assets 

increased by the commission paid to the financial intermediary under the 

intermediation contract. 

Tangible assets 

The tangible assets recorded an increase as opposed to 2006 as a result of: 

Asset commissioning during 2007; 

Transfer to the company’s domain of lands based on ownership certificates 

issued by the Ministry of Economy and Finance. 

Receivables 

On December 31 st , 2007 the receivables balance increased as opposed to 2006, due to 

the application of a new transmission tariff as of October 1 st , 2007. At the same time, 

the outstanding receivables decreased as opposed to 2006, by cashing-in of receivables 

from SC Termoelectrica SA. 

Cash and bank accounts 

On December 31 st , 2007, the cash available in bank accounts substantially increased as 

opposed to 2006. Such increase is firstly justified by cashing-in of outstanding 

receivables and secondly by cashing-in of amounts from the initial public offer of 

shares, developed within November 26 th - December 7 th , 2007. 


The liabilities to be paid within a year raised as opposed to December 31 st , 2006. Such 

raise is justified by a 5-10% increase in the oil royalty for trimester IV of 2007, as 

opposed to the same period of 2006. 

Lond-term liabilities 

Liabilities to be paid within more than a year recorded a slight decrease as opposed to 

2006, which is justified by: 

Decrease in long-term bank loans; 

Diminishing of liabilities related to the Concession Agreement, by transferring of 

pipelines to be retired, from the state public domain to the state private domain. 

Page 40 of 54


On December 31 st , 2007, the long and medium term loans commited by Transgaz were 

as follows: 

Tag 

Balance on 

Bank Currency Value of loan 

no. 

31.12.2007 

1. IRDB USD 6,933,684.00 3,554,913.17 

2. GAZPROMBANK RUSSIA USD 48,340,434.44 14,291,954.84 

3. GAZPROMBANK RUSSIA USD 67,000,000.00 21,709,804.06 

4. EFIBANCA ITALY EUR 3,106,007.10 866,940.00 

5. EFIBANCA ITALY EUR 3,187,500.00 1,646,298.53 

6. EFIBANCA ITALY EUR 2,127,720.00 1,063,860.00 

7. RAIFFEISEN BANK ROMANIA EUR 1,140,935.45 426,895.45 

8. ABN AMRO BANK ROMANIA EUR 6,436,919.95 4,425,382.45 

9. UNICREDIT TIRIAC ROMANIA RON 100,600,000.00 52,950,000.00 

Own capital 

The subscribed and paid-up capital increased on December 31 st , 2007 as opposed to 

December 31 st , 2006 as follows: 

- The listing of lands amounting to lei 58,510, for which ownership deeds have 

been obtained, under the company’s share capital; 

- The issuance of new shares by primary initial public offering amounting to lei 

13,849,560. 

The premium for share issuance, by initial public offering, amounting to lei 

251,933,300, was listed under Capital Premium and stands for the difference between 

the nominal value (lei 10) and the subscription value of the shares (lei 191.92). 

The reserves recorded an increase following the appropriation of 5% of the profit for 

2007 to the legal reserve and the listing of a net profit share for 2006 under Other 

Reserves. 

5.1.2. Profit and loss account 

The operating revenues are resulted from the following activities: 

Gas transmission; 

International gas transit; 

Import gas delivery; 

Other operating revenues. 

Page 41 of 54


The Profit and loss account for 2005-2007 is as follows: 

Tag 

Achieved (lei) 

Specification 

Dynamics (%) 

no. 

2005 2006 2007 

0 1 2 3 4 5=3/2 6=4/3 7=4/2 

1. TOTAL revenues, of 

which: 

800,729,114 982,295,999 1,064,236,983 122.68 108.34 132.91 

1.1 Operating revenues 787,767,495 941,199,966 1,051,656,687 119.48 111.74 133.50 

1.2 Financial revenues 12,961,619 41,096,033 12,580,296 317.06 30.61 97.06 

1.3 Extraordinary revenues - - - - - - 

2. TOTAL expenses, of 

which: 

625,671,377 696,005,832 794,906,765 111.24 114.21 127.05 

2.1 Operating expenses 589,761,151 675,881,508 780,369,561 114.60 115.46 132.32 

2.2 Financial expenses 35,910,226 20,124,324 14,537,204 56.04 72.24 40.48 

2.3 Extraordinary expenses - - - - - - 

3. GROSS PROFIT, of 

which: 

175,057,737 286,290,167 269,330,218 163.54 94.08 153.85 

3.1 Operating outcome 198,006,344 265,318,458 271,287,126 133.99 102.25 137.01 

3.2 Financial outcome -22,948,607 20,971,709 -1,956,908 x x 8.54 

3.3 Extraordinary outcome - - - - - - 

4. TAX ON PROFIT 36,610,652 48,377,640 45,323,764 132.14 93.69 123.80 

5. NET PROFIT 138,447,085 237,912,527 224,006,454 171.84 94.15 161.80 

Operating revenues 

Operating revenues achieved during 2005-2007: 

Tag 

no. 

Achieved 

Specification 

2005 2006 2007 

Dynamics (%) 

0 1 2 3 4 5=3/2 6=4/3 7=4/2 

1. Revenues from 

transmission 

- thousand cm 16,447,067 15,237,343 14,546,575 92.64 95.47 88.44 

- lei 510,193,093 620,810,631 735,133,766 121.68 118.42 144.09 

- lei/1000 cm 31.02 40.74 50.54 131.34 124.04 162.91 

2. Revenues from transit 

- lei 219,545,884 212,666,684 190,267,099 96.87 89.47 86.66 

3. Revenues from gas 

deliveries 

- thousand cm 60,182 86,949 156,764 144.48 180.29 260.48 

- lei 36,835,658 71,623,279 110,296,420 194.44 154.00 299.43 

- lei/1000 cm 612.07 823.74 703.58 134.58 85.41 114.95 

4. Other operating 

revenues 

- lei 21,192,860 36,099,371 15,959,401 170.34 44.21 75.31 

5. TOTAL OPERATING 

REVENUES 

787,767,495 941,199,965 1,051,656,687 119.48 111.74 133.50 

Page 42 of 54


During 2005-2007, the operating revenues recorded a substantial increase determined 

by: 

- An increase in the transmission tariff for the services provided; 

- An increase in the delivered amount of import gas. 

Operating expenses 

The operating expenses for 2005-2007 are as follows: 

Tag 

no. 

Specification 

Achieved 

2005 2006 2007 

Dynamics (%) 

0 1 2 3 4 5=3/2 6=4/3 7=4/2 

1 Technological consumption and 

loss within the transmission 

system 

- thousand cm 399,194 388,536 329,718 97.33 84.86 82.60 

- lei 164,735,231 168,250,642 148,497,819 102.13 88.26 90.14 

- lei/1000 cm 412.67 433.04 450.38 104.94 104.00 109.14 

2 Ancillary materials 10,049,614 15,000,862 11,220,089 149.27 74.80 111.65 

3 Energy, water 2,902,552 3,408,750 3,887,001 117.44 114.03 133.92 

4 Depreciation and provisions 60,777,756 69,400,607 71,720,106 114.19 103.34 118.00 

5 Works and services executed 

by third parties 

58,609,869 79,865,370 107,711,572 136.27 134.87 183.78 

6 Salary fund 87,291,894 102,305,751 129,502,332 117.20 126.58 148.36 

7 Social Insurance Contributions, 

unemployment allowances, 

health and other personnel 

expenses 

28,902,441 31,627,630 38,020,045 109.43 120.21 131.55 

8 Gas share 15,232,413 24,301,737 33,319,997 159.54 137.11 218.74 

9 Meal vouchers 7,018,689 7,393,420 7,769,973 105.34 105.09 110.70 

10 Other material expenses 1,814,481 2,408,826 2,651,817 132.76 110.09 146.15 

11 Other tax and charge expenses 2,985,559 8,052,811 11,485,048 269.73 142.62 384.69 

12 Charge for gas transmission 

and international gas transit 

licenses 

1,872,586 1,878,200 1,727,988 100.30 92.00 92.28 

13 Royalty for NTS concession 35,851,408 42,312,585 60,863,932 118.02 143.84 169.77 

14 Other operating costs 75,166,682 48,187,629 42,439,204 64.11 88.07 56.46 

15 Import costs 

16 

- thousand cm 60,182 86,949 156,764 144.48 180.29 260.48 

- lei 36,549,976 71,486,688 109,552,639 195.59 153.25 299.73 

- lei/1000 cm 607.32 822.17 698.84 135.38 85.00 115.07 

TOTAL 

EXPENSES 

OPERATING 

589,761,151 675,881,508 780,369,561 114.60 115.46 132.32 

Page 43 of 54


The operating expenses increased during 2005-2007, mainly because of the following 

factors: 

- Expenses for works and services executed by third parties increased as a result 

of the performance of works formerly planned to be carried out under our 

management; 

- The royalty for the concession of the NTS increased in the 4 th quarter 2007 from 

5% to 10%; 

- The cost of the delivered import gas accrued due to an increase in the delivered 

gas quantities. 

Financial expenses 

The financial expenses are mainly broken-down on expenses for interests and 

commissions related to the loans committed and expenses for exchange rate 

differences which recorded a decrease because of the national currency fluctuation as 

opposed to other currencies. 

Gross profit 

The decrease in the gross profit for 2007 compared to 2006 is justified by: 

- Delayed application of new tariffs, therefore the tariff for the first year of the 

second regulatory period (July 1 st , 2007 – June 30 th , 2008) entered into force 

only in the 4 th quarter of 2007 based on negotiations with the National Energy 

Regulatory Authority on the value of the regulated rate of return; 

- Decrease in the financial proceeds generated by the depreciation of the leu in 

relation with the other currencies; 

- Doubling of the oil royalty in the 4 th quarter of 2007. 

Although the gross profit decreased, the “Gross Profit/Gas amount circulated through 

the NTS” (lei/1000 cm) ratio recorded a positive growth in 2007 as opposed to 2006, 

increasing from lei 15.63/1000 cm to lei 15.82/1000 cm which stands for an increase 

of about 1.40%. 

Page 44 of 54


5.1.3. Cash-flow 

The cash flow during 2005-2006 is rendered below: 

Ratio 

Financial year ended on December 31 st 

2005 2006 2007 

Operational activities: 

Net profit 138,447,085 237,912,527 224,006,454 

Depreciation expense 62,650,342 71,278,807 73,448,093 

Expense/ (revenues) for floating assets provisions 5,975,614 -13,202,598 3,266,022 

Loss on receivables of various debtors 0 0 143,015 

Adjustment on risk and expense provisions 3,887,872 -11,004,095 9,581,049 

Penalties on dividends in arrears for 2000 – 2003 and 

45,483,318 6,234,233 0 

2006 

Interest revenues -2,605,662 -1,703,052 -4,879,452 

Interest expenses 16,330,276 14,717,567 12,196,687 

Profit/loss from sales of tangible fixed assets 2,020,757 -18,761,597 93,250 

Other expenses/ financial revenues 0 -832,931 -451,993 

Tax on profit 36,610,652 48,377,640 45,323,764 

Increase in cash from operation before floating 

capital amendments 

308,800,254 359,421,697 362,726,889 

Decrease in the balance of stocks 336,242 4,711,468 3,963,644 

(increase) / decrease in balances of commercial 

receivables and other receivables 

-20,913,033 -194,193,492 -163,688,924 

Increase in balances of commercial liabilities 48,030,224 160,312,593 163,559,425 

Net cash-flow from operational activities 336,253,687 330,252,266 366,566,034 

Cashed interest 2,381,565 2,024,387 4,881,043 

Paid interests -16,194,649 -8,696,715 -5,192,094 

Payments related to the employees’ share in profit -3,887,872 -4,350,025 -4,862,190 

Tax on paid profit -54,592,171 -35,628,007 -48,070,130 

Cash flow from operating activities 263,960,560 283,601,907 313,322,663 

Cashed dividends 32,140 0 0 

Sales of financial fixed assets 0 627,736 -758,851 

Receipts from loans granted 0 832,931 451,993 

Receipts from sales of fixed tangible assets 0 20,271,750 563,403 

Fixed asset acquisition -246,940,568 -189,022,637 -202,840,254 

Cash flow used for investment activities -246,908,158 -167,290,220 -202,583,701 

Loan reimbursement 5,646,457 -41,884,419 -18,981,205 

Loan withdrawals -14,499,667 25,889,683 52,950,000 

Paid dividends 0 -71,388,676 -121,384,642 

Capital increase 13,849,560 

Issuance premium 251,933,300 

Cash flow used for financing activities -8,853,210 -87,383,912 178,367,003 

Total cash-flow 8,199,192 28,927,775 289,105,965 

Variation in cash and cash equivalents 

Cash and cash equivalents at the beginning of the 

period 

24,846,071 33,045,263 61,973,038 

Variation in cash and cash equivalents 8,199,192 28,927,775 289,105,965 

Cash and cash equivalents at the end of the period 33,045,263 61,973,038 351,079,003 

5.2. Financial risk management 

By the nature of business, our company is subject to various risks including: credit 

risks, currency risks, interest rate risks, liquidity risks and capital market risks. The 

Page 45 of 54


management seeks to reduce the potential negative effects of such risks on the 

financial performance of our company. 

5.2.1. Credit risk 

The company is subject to credit risks generated by its commercial receivables and 

other types of receivables. All new clients shall provide references on their credit 

worthiness. The due date of receivables shall be attentively monitored and the amounts 

due after deadline shall timely be observed. 

5.2.2. Currency risks 

The company is subject to the currency exchange rate fluctuations by debts from loans 

or by commercial debts denominated in currency. Due to associated high costs, the 

company’s policy does not provide the use of financial instruments for mitigating such 

risks. 

5.2.3. Interest rate risks 

The company’s financial cash flows are affected by interest rate fluctuations, mainly 

due to the variable interest loans. The company does not use interest rate hedging 

instruments. 

5.2.4. Liquidity risks 

A cautious management of liquidity risks implies keeping sufficient cash and credit 

lines available. Due to the company’s business, Transgaz seeks flexibility in the 

financing means, by keeping credit lines available for financing operating activities. 

5.2.5. Capital market risks 

Transgaz increased its share capital by initial public offering of shares developed 

within November 19 th – December 7 th , 2007 followed by trading of allocation rights 

and shares on the Bucharest Stock Exchange. 

Under Law no. 297/2004 on the capital market, the companies admitted for trading 

shall report to the Romanian National Securities Commission and to Bucharest Stock 

Exchange. Therefore, Transgaz shall immediately report any legal deed concluded 

with administrators, employees, shareholders and third parties related thereto. The 

company shall make available trimestrial, semestrial and annual reports both to the 

public and to the Romanian National Securities Commission and shall notify 

shareholders and the Romanian National Securities Commission of priviledged 

information, of any financial, corporate, environmental factors, of any change in 

objectives or business strategy and investment plans significantly influencing the 

company’s business. 

As a small stock exchange, Bucharest Stock Exchange is quite fragile as regards the 

fluctuations in the market price of listed shares, such price being influenced by the 

information provided by the issuer. 

Page 46 of 54


CH.6. MISCELLANEOUS 

6.1. The rating agency, Standard&Poors improved the company’s rating from 

“BB+”, positive outlook, to “BBB-“, negative outlook, tnat is “investment grade”, 

Transgaz being the sole Romanian company granted such rating. 

The upgrading of Transgaz’ rating reflects the company’s improved financial profile 

following the successful completion of the initial public offering of shares and the 

increase in the share and visibility of the operational cash flow, as a result of a 

significant growth in the transmission tariff. 

The negative outlook reflects Romania’s perspective and the likelihood of adverse 

macro-economic growth in Romania, as well as a certain uncertainty related to the 

influence the state might have on the company’s financial and dividend policies. 

Transgaz’ rating could be reviewed as stable in case of any upgrading of the sovereign 

rating. 

6.2. Under the capital market legislation, that is Law no. 297/2004 and Regulation no. 

1/2006 of the Romanian National Securities Commission on the security issuers and 

operations, the trading of Transgaz’ shares on the regulated market, managed by 

Bucharest Stock Exchange, started on January 24 th , 2008. 

6.3. The amount gained as a result of the IPO, i.e. lei 251,933,300, was recorded as an 

own financing source in February 2008, and was intended to partially finance the 

investment programme for 2008. 

6.4. The “Network Code for the National Gas Transmission System” was approved 

under Order no. 54/December 13 th , 2007 of The National Energy Regulatory Authority 

and published in the Official Journal no. 71 bis of January 30 th , 2008. The Code shall 

enter into force on July 1 st , 2008 and shall provide regulations of the NTS operating 

conditions. The application of this Code confirms the company’s efforts to be in line 

with the European legislation. The introduction of unbalancing charges for users leads 

to an inproved NTS operation and to more disciplined users thereof. 

6.5. January 15 th , 2008 was the kick-off date of the informatics project “Informational 

Platform for SNTGN TRANSGAZ SA” which was meant to ensure communication 

between the TSO and its trading partners for the application of the Network Code. The 

project shall be completed on September 20 th , 2008. 

Page 47 of 54


6.6. The procedures for gas acquisition and storage meant to balance the NTS were 

started on March 17 th , 2008, as an obligation provided under Gas Law no. 351/2004. 

6.7. Achievements related to the Nabucco project: 

- Change of Transgaz’ interest share in the Nabucco project as of March 5 th , 2008, 

from 20% to 16.67% as a consequence of a new shareholder’s accession, i.e 

RWE Gas Midstream GmbH Germania; 

- Increase in the capital held by Transgaz as a shareholder of the Nabucco Gas 

Pipeline International GmbH, from Euro 7,000 to Euro 127,000, by application 

of a financing mechanism which ensures the relocation, upon the end of the 

financial year, of the amounts trimestrially transferred from the reserves account 

to the share capital account of the Nabucco Gas Pipeline International GmbH. 

Nicolae Turdean, 

Chairman of the Board of Administration 

Ioan Rusu, 

Director General 

Radu Moldovan 

Director of the Economic Division 

Page 48 of 54


ANNEXES TO CH.4, Item 4.1.a) 

NICOLAE TURDEAN 

Chairman of the Board of Administration 

Mediaş, no. 1, C. I. Motas Sq., Sibiu county 

March 27 th , 2007- present (until 

March 27 th , 2009) 

Transgaz - Chairman of the Board of Administration 

1999 – present The Ministry of Economy and Commerce – Project Management Unit 

- Director 

1993-1999 • National Agency for Mineral Resources – General Division 

for Mineral Resource Management - Director General, 

• Member of the National Commision for the restructuring of 

RENEL (the Electric Power Autonomous Regie), 

• Member of the National Commission for the restructuring of 

the mining industry 

1992-1993 The Ministry of Industry – Mining Industry Department – Deputy 

Director General 

1991-1992 The Ministry of Industry – Mining Industry Department - Director of 

the Division for Research, Development and Rehailitation 

1989-1990 The Ministry of Mines – Production Department – Head of Coal 

Department 

1987-1989 The “Valea Jiului” Mining Company – “Valea de Brazi” Mine- 

Director of Production 

1985-1987 The “Valea Jiului” Mining Plant – “Campul lui Neag” mine – 

Production Chief Engineer 

1983-1985 The Micro-quarry Enterprise of the “Valea Jiului” Mining Plant, 

Production Chief Engineer 

1980-1983 The “Valea Jiului” Mining Plant, Mining Engineer 

1976-1980 The “Motru” Mining Enterprise, Head of “Rosiuta II” mining 

Nicolae Turdean’s sphere of action comprises project management and acquisition procedures (assets, 

services, civil works) within the projects funded by the World Bank, regulatory bodies, and elaboration of 

regulations for the mineral resource and gas fields, PHARE energy programmes (Synergy Group - 

Romania). 

Nicolae Turdean graduated marter courses on the management of mining activities, within the Technical 

University of Petrosani (1994-1995) and holds an engineer’s license granted by the above-mentioned 

university (1972-1995). 

Nicolae Turdean is the author of numerous reference books and a member of various associations, such as 

the Romanian Engineer’s General Association (active member as of 1993), the Romanian Association for 

Energy Policies (active member as of 1995) and the National Commission of Mining Engineers (founder in 

1996). 

Page 49 of 54


ELENA IANDA 

Member of the Board of Administration 


April 12 th , 2005- present (until 

April 12 th , 2009) 

1994-present 

Transgaz - administrator 

The Ministry of Economy and Finance – State Archives – The General 

Regulatory Division – Deputy Director General 

1993-1994 S.C. Romsim S.A. – Economic Director 

1992-1993 S.C. Romicon 2000 S.A. – Economic Director 

1990-1992 The Ministry of Public Finance - Economist 

1983-1990 The Ministry of Industry and of Machine Construction, The Ministry 

of Heavy Equipment 

1980-1983 ICE Mecanoexport Import - Economist 

1976-1980 IMA Semanatoarea Bucharest - Economist 

Elena Ianda participated in number of training programmes such as: master courses in Public Management 

(The Academy for Economic Studies), management courses on public institutions and programmes and on 

budget organized by the Ministry of Public Finance, the „Public Enterprise Restructuring and Privatization” 

ILI course and the „Investment Appraisal, Mergers and Acquisitions, Ratio Analysis” course (Middlesex 

University Business School and OK Service Corporation). 

Elena Ianda is a specialized financial auditor and a chartered accountant as well. 

Page 50 of 54


NICOLAIE SIMESCU 



January 22 nd , 2007- present (until 

April 12 th , 2009) 


1996-1997 Natural Gas Autonomous Regie, “Romgaz” – Director General’s 

Advisor 

1992-1996 Natural Gas Autonomous Regie, “Romgaz” – Director of the Gas 

Transmission and Distribution Division 

1978-1990 Gas Central Office (turned into Romgaz RA Medias) where he had 

various positions, such as: chief engineer I, head of departments, chief 

engineer, general director’s advisor, director of the National Gas 

Dispatching Centre, Bucharest 

1961-1978 Main Pipeline Operating Enterprise, Medias – various positions such 

as: head of departments, deputy chief engineer, chief engineer and 

technical director for 12 years 

1956-1961 “Tg. Jiu” Oil Trust, activity in the field of construction, mounting and 

oil related operating works and in the fields of mechanics and energy; 

Nicolaie Simescu is the author of numerous reference books and of various inventions. He holds important 

distinctions and a doctor’s title – Engineer Doctor’s Title granted by the Oil, Gas and Geology Institute, 

Bucharest. 

Nicolaie Simescu attended a number of training courses, of which: 

− L’Ecole d’application des techniques gaziers, France (diploma 1996); 

− The Faculty of Machines and Equipment within the Oil and Gas Institute (Mechanic Engineer 

diploma) 

− The Technical and Economic Faculty (Economist Engineer Diploma) 

− The Training Centre for Managing Staff of the State Economy and Administration, Bucharest; 

− „Customer-training, heavy maintenance” of Gas Turbine Corporation – Dundee, Scotland; 

− The Ministry of Oil – Oil and Gas Training Section. 

Nicolaie Simescu holds the following special licenses: expert’s license „Earth gas, commpresion, transport, 

distribution, engineer” of the European Union with „Code Diplomatique”; Ist degree license for the design, 

operation, and maintenance of the transmission pipelines and of the equipment related thereto; Ist degree 

license for the design, operation, and maintenance of the distribution pipelines and of the equipment related 

thereto. 

Page 51 of 54


CONSTANTIN ZIDARU 



July 26 th , 2007- present (March 

27 th , 2009) 

October 2006 - July 2007 

May 2004 - September 2006 

August 2002 - May 2004 

February 1990 - July 2002 

July 1986 - February 1990 

December 1983 - June 1986 

December 1978 - December 1983 

August 1972 - December 1978 


SC RODMIR EXPERT S.R.L. Bucharest – Member of the Board of 

Administration 

SC CONPET S.A. Ploiesti – Director of Dvelopment 

SC CONPET S.A. Ploiesti – Technical Director 

SC CONPET S.A. Ploiesti - Director General 

The Ministry of Mines, Oil and Geology – Senior Inspector 

The Ministry of Mines, Oil and Geology – Engineer 

The Oil Transmission Enterprise – Ploiesti – Head of Department 

The Oil Transmission Enterprise – Ploiesti – Engineer 

Constantin Zidaru attended several training courses, as follows: “Introduction to the Quality Management” 

within TUV Rheinland Berlin-Brandenburg Romania (2002); “Strategical Alliaces and Business 

Achievements” – UPG Ploiesti (2001); “Management and International Economic Relations” post-university 

course (Academy for Economic Studies – 1999); “Leadership” programme funded by PHARE (1996); 

“Corporate Economic and Financial Assessment” - AGER Prahova (1995); “Current issues on the 

International Economic Relations” – International Bucharest Centre (1994); “Oil Unit Management” – 

Training Centre of the Ministry of Oil (1990); Long-duration Superior Studies of the Oil, Gas and Geology 

Institute, Bucharest (1967-1972). 

Page 52 of 54


IOAN RUSU 



March 27 th , 2007 – present (until 

March 27 th , 2009) 

May 21 st , 2007- present 

Transgaz - Administrator 

Transgaz - Director General 

2000 – May 2007 Transgaz, Technical Development Division - Director 

1999 – 2000 SNGN Romgaz - Technical Development Division - Director 

September 1998 - 1999 

July 1998 - September 1998 

September 1997 - July 1998 

May 1997- September 1997 

SNGN Romgaz – Pipeline Operation Division - Director 

SNGN Romgaz – Technical Development Deputy Director 

CONDMAG S.A. Braşov – Chief Engineer 

Gas Autonomous Regie, Romgaz, Investment Department – Head of 

Department 

1991 –May 1997 Gas Pipeline Operating Enterprise, Mediaş - Technical Development 

Deputy Director 

1990 – March 1991 Gas Pipeline Operating Enterprise, Mediaş – Head of Investment 

Supervision Office 

1984 - 1990 Gas Pipeline Operating Enterprise, Mediaş, Engineer – in charge with 

co-ordination of overhauls to gas transmission main pipelines and 

equipment related thereto 

1983 - 1984 Gas Pipeline Operating Enterprise, Mediaş – Mediaş Regional Office 

– Head of Emergency Intervention Brigade 

1982 Gas Pipeline Operating Enterprise, Mediaş 

Ioan Rusu graduated a series of training courses, as follows: 

- Investment Training within “Oil and Gas Personnel Training Section within the Gas Central Office, 

Medias” (1989) ; 

- Investment Training (1985) and Underground Pipeline Corrosion Control (1986) within the “Centre 

for Oil and Gas Personnel Training – Bucharest; 

- Training courses for ROMGAZ personnel in the fields of management and gas transmission 

company running, SCADA and telecommunications in the gas industry – within projects for the 

restructuring and developing of Romgaz, project conducted by the following companies: Arthur 

Andersen and Andersen Consulting of Canada, 

- Training courses organized by the Ministry of Economy and Commerce on the application of 

harmonized industry and trade legislation (2000 – 2006), such as: “Specific methods and procedures 

for preventing and fighting against the corruption within public institutions and companies” 

Mr. Rusu’s research activity consists of: 

- Participation in the drawing up of various laws such as: 

o Oil Law no. 134/1995 and Building Quality Law no. 10/1995 on – inclusion of buildings 

into “B” importance category, respectively highly important buildings; 

o Gas Law no. 351/July 2004 ; 

o GD no. 1043/July 2004 – approval of the Regulation on the access to the National Gas 

Transmission System and to the Gas Distribution System; 

o Decision no. 1231/September 2004 of the National Gas Regulatory Authority – The 

Regulation for Appeal, Notification and Sanctioning of Deviations from the Regulations 

Issued within the Gas Sector; 

o Joint Order no. 47/July 2003 of the Ministry of Economy and Commerce and no. 

1203/July 2003 of the Ministry of Transport, Buildings and Tourism and no. 509/August 

Page 53 of 54


2003 of the Ministry of Domestic Affairs on the approval of the procedure for 

authorizing the execution of buildings located near objectives/systems related to the oil 

and gas sector . 

- Participation in the drawing up of various standards and norms, such as: 

o DN no. 3915 – 94/95 – Design and Construction of Gas Transmission Pipelines and 

Manifolds – drawn up by Gazproiect Braşov ; 

o Standards on corrosion-control coating of the metal underground pipelines – drawn up by 

I.C.P.P.C. Ploieşti; 

o Technical Guidelines for surveilling gas transmission pipeline execution works – means of 

quality control and surveillance of construction works – mounting ; 

o Technical norms for design and execution of upstream gas supply and transmission 

pipelines – approved by Decision no. 1.220/2006 of the National Gas Regulatory Authority. 

Page 54 of 54

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