ANNUAL REPORT OF “TRANSGAZ” MANAGEMENT INDIVIDUAL ...

ANNUAL REPORT OF “TRANSGAZ” MANAGEMENT INDIVIDUAL ... ANNUAL REPORT OF “TRANSGAZ” MANAGEMENT INDIVIDUAL ...

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SNTGN “TRANSGAZ” SA Medias Annual Management Report for 2007 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

SNTGN “TRANSGAZ” SA Medias Annual Management Report for 2007 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

SNTGN “TRANSGAZ” SA Medias Annual Management Report for 2007<br />

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

2007, 461 held licenses, and as regards the rest of 47, the necessary documentation for<br />

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

according to the due date and methodology.<br />

Consequently, there is 100% compliance in what the licensing procedure for<br />

environmental protection is concerned.<br />

The dynamics of the annual licenses for the last three years is graphically illustrated<br />

below:<br />

No. of licenses<br />

<strong>ANNUAL</strong> GROWTH <strong>OF</strong> THE NUMBER <strong>OF</strong> ENVIRONMENTAL LICENSES<br />

600<br />

495<br />

495<br />

508<br />

461<br />

500<br />

398<br />

400<br />

339<br />

300<br />

155<br />

200<br />

100<br />

97<br />

47<br />

0<br />

2005 2006 2007<br />

Year<br />

Total objectives Licensed objectives Objectives to be licensed<br />

1.1.6.4. Fines, accidental occurrences and disputes<br />

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

The National Environment Guard.<br />

Transgaz was not involved in any environmental disputes.<br />

Due to the permanent supervision of equipment, the personnel being rendered aware of<br />

consequences, the compliance with labour instructions and the relatively normal<br />

weather conditions, no accidental occurrences affecting the environment were<br />

recorded in 2007.<br />

1.1.7. Prospects on Transgaz’ activity<br />

Within the context of Romania’s adhesion to the EU and for the purpose of<br />

implementing strategic objectives essential for Transgaz’ turning into a European<br />

company, the monopoly position of a NTS operator has to be reinforced and Transgaz<br />

has to assert importance at a regional level, by active participation in all European<br />

organizations and in projects of regional or European interest and by fruitful<br />

partnerships with companies in the field.<br />

The more and more numerous international organizations playing an extremely<br />

important role in gathering together all energy market players in order to identify the<br />

key directions towards the creation of a sole domestic European market.<br />

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

association of the European gas infrastructure operators. Such affiliation proved<br />

beneficial for our company from the point of view of the access to information on the<br />

Page 20 of 54

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