Date: 28 March 2018

Romanian BRUA to be Built by a Turkish Company

Transgaz, the Romanian gas state owned company, will purchase the pipeline needed to build the Romanian section of the BRUA gas pipeline from Turkey. The estimated value of the contract is EUR 126 million. Since last year, the local Romanian steel producers have asked authorities to use the EU funds in the benefit of the Romanian industry. The Romanian gas company Transgaz SA has to build almost a third of the gas pipeline Bulgaria-Romania-Hungary-Austria (BRUA) in the next few years.


The Transgaz state company, which manages the Romanian gas pipeline network, has been granted permission from the Romanian Ministry of Energy to build the BRUA gas pipeline, so the works can begin, the Romanian company announced on Wednesday. Via the pipeline connecting Bulgaria, Romania and Hungary, natural gas extracted from the Black Sea will be available to Hungary. The gas pipeline will pass through Giurgiu, Teleorman, Dambovita, Arges, Olt, Valcea, Gorj, Hunyad, Krassó-Szorény and Temes. The construction contract for the 478-kilometer long pipeline from Romania to Podes to Temasrékás (Recas) was signed in 2017.
Last week, the Turkish company Toscelik Spiral Boru won the tubular material delivery auction organized by Transgaz for BRUA gas pipeline. Six other companies entered the bidding process, started more than a year ago. The deadline for the award was prolonged several times due to the numerous appeals. If any objections will be raised this time, Transgaz will be able to sign the contract with the Turkish company in 10 days.

Part of the BRUA funding is provided by the European Union, the gas pipeline being considered by the European Commission as a strategic project to reduce Russia’s dependence on natural gas, one of the supply sources for BRUA being the Black Sea deposits. According to the project, BRUA will include three compressing stations. For the Romanian section, estimated at around EUR 500 million, Transgaz received a EUR 179 million grant from the European Commission, borrowed EUR 50 million from the European Investment Bank (EIB) and EUR 60 million from the European Bank for Reconstruction and Development (EBRD).

BRUA project is supposed to help Romania to achieve competitive transmission costs and consequently competitive gas transmission tariffs, as compared to other energy projects (including in comparison to the relatively high costs of liquefied natural gas produced in Northern African countries, representing one of the main gas supply alternatives), to help meeting the forecast increase in demand in European countries in the context of an on-going decline in medium and long-term gas supplies from Russia and in ensuring future interconnection with pipelines supplying gas from the Black Sea region, helping to eliminate the risks of interruption of supply and provide constant energy for industrial production processes.

Transgaz will enter the Moldovan gas market this year, following the acquisition of Vestmoldtransgaz and could extend its activities in Greece too, as the final announcement regarding DESFA privatisation is expected to be revealed soon.

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