As we approach the 5th Black Sea Oil & Gas Conference, GBC has asked Ion Sterian, CEO, Transgaz, a few questions on the current situation in the energy sector in Europe, company plans and projects.
Transgaz is implementing a major infrastructure project which may increase Europe’s energy security. Could you please provide an overview on the development of the project and on the milestones of the management plan?
The „Development on Romania’s territory of the National Gas Transmission System on the Bulgaria-Romania-Hungary-Austria” corridor (BRUA) is an ambitious project meant to increase the security of gas supply at regional level – by the diversification of Europe’s gas supply sources (access to the Caspian gas sources) and to ensure the appropriate capacities for the interconnections between the national and the neighboring gas transmission systems – by ensuring in the Bulgaria direction of a gas transmission capacity of 1.5 bcm/y and in the Hungary direction of a gas transmission capacity of 1.75 bcm/y in Phase 1 and 4.4 bcm/y in Phase 2.
BRUA Project is included in the updated list of projects of common interest adopted by the European Commission in November 2015:
- 6.24.2 The Development on the Romanian territory of the Gas Transmission System on the Bulgaria – Romania – Hungary – Austria Corridor, Podișor-Horia GMS and 3 new compressor stations (Jupa, Bibești and Podișor) (phase 1)
- 6.24.7 Expansion of transmission capacity in Romania to Hungary up to 4.4 mld.mc/a (phase 2)
As for the project development status, it is worth mentioning that the Environmental Impact assessment and the FEED were completed and the Environmental Permit and the Construction Permit were obtained.
Out of the project milestones, I would like to point out that, until now, two of the contracts for the procurement of long lead items (compressor units, electrically insulating joints) were awarded and signed and the rest of the contracts (for the valves, pipping and curves) will be awarded and concluded by the end of this year.
We estimate that, in quarter I of 2018, the latest, the contracts for the pipeline execution works, the automation and pipeline securing works and the works for the execution of the compressor stations will also be concluded, so that by December 2019 Phase 1 of the Project will be completed in line with the assumed implementation schedule.
Important opportunities also involve challenges. In your opinion what aspects should be solved as soon as possible so as to ensure the rapid progress of the BRUA pipeline?
The implementation of national importance gas projects involves numerous challenges, some of them being determined by the scale and complexity of such projects.
Processes related to the authorization procedure, obtaining rights of way for the execution of the works, temporary occupation of the forest lands, temporary removal of the land from the agricultural use, establishing a relationship with the owners and land users, etc. are complicated, time-consuming stages.
Therefore, the issue of “Law 185/2016 on measures necessary for the implementation of projects of national importance in the natural gas field ” represents an important element to be quantified within the BRUA pipeline progress, while being an element of novelty in the implementation of projects enjoying such a status.
The new incidental legal framework comes, in this respect, with a series of solutions on issues such as:
- Land rights – established and recognized in favor of the project promoter;
- Preliminary measures to identify the buildings affected by the construction, i.e. the existence and operation of pipeline/ pipelines subject of gas projects of national importance;
- Procedure for enforcing the rights regulated by law;
- The procedure applicable to the works
- Issue of permits and authorizations.
One of the most important objectives of the new regulation is to simplify certain stages and processes related to the authorization procedure. This is only a superior valorization of the time factor that is a key element for the implementation of these projects, including the BRUA Project.
As for the 5th Black Sea Oil and Gas Conference almost all the offshore operators in the region confirmed their participation. How important is the development of the Black-Sea off-shore operations for the progress of BRUA?
The BRUA project is a project for the development of the National Gas Transmission System consisting in the construction of a new gas transmission pipeline to connect the technological Node Podișor with the Gas metering Station Horia in the Podişor – Corbu – Hurezani – Haţeg – Recaş – Horia direction.
Thus, the BRUA project is not directly correlated with the Black Sea off-shore developments. The connection between the Black sea shore and the technological node (TN) Podișor will be ensured by another project included in Transgaz’ 10 year Network Development Plan 2017-2026 and in the second EU PCI List – PCI 6.24.8„Development on Romania’s territory of the Southern Corridor to take over Black Sea gas – The Black Sea – Podișor pipeline.”
In this context, Transgaz closely monitors the Black Sea developments and is constantly in contact with the title holders of the off-shore blocks in order to assess the progress of the complementary projects.
Such a cross-border project requires important investment decisions. Which are the technological needs related to the implementation of BRUA?
BRUA Project aims at the construction on the territory of Romania of an approximately 529 km, 32’’ (DN 800) and 63 bar design pressure pipeline. 3 compressor stations, 43 block valves and 20 cathodic protection stations will be located along the pipeline route.
The BRUA pipeline will be connected to the existing National Gas Transmission System in the technological nodes: Podișor, Corbu, Hurezani and Recaș.
BRUA Project is implemented on the territory of Romania as follows:
Phase 1:
- Gas transmission pipeline Podișor – Recaș around 479 km long;
- GCS Podișor, GCS Bibești and GCS Jupa, each compressor station being equipped with two turbo compressors each (one in operation and one back-up), with the possibility to ensure bi-directional gas flows.
Phase 2:
- Gas transmission pipeline Recaș – GMS Horia, approximately 50 km long:
- Expansion of the GCS Podișor, GCS Bibești and GCS Jupa, each compressor station being equipped with an additional turbo-compressor unit;
- Expansion of the existing gas metering station – GMS Horia.
The implementation of this project implies a significant investment effort. Phase I of the project requires investment costs of approximately Euro 480 million, Transgaz received a grant from the European Commission through the Connecting Europe Facility both for the FEED related to the three compressor stations (Euro 1.52 million – 50 % of the total amount of the estimated costs) and for the works (Euro 179.32 million – 40% of the total eligible costs).