Transgaz, MOL’s FGSZ To Resume Bid On Gas Transit Via Arad-Szeged Pipeline

The procedure will be resumed after September 12, due to lack of interest from investors, as the reserving demand was 70% lower compared with the capacity offered, Transgaz said Tuesday in a press statement.

Companies interested in reserving a capacity of 180,000 cubic meters of gas per hour through Arad-Szeged pipeline, developed by the two companies, were expected to file requests between August 5 and September 3.

The pipe’s initial capacity is 1.7 billion cubic meters annually, while its maximum capacity is 4.4 billion cubic meters annually.

Transgaz and FGSZ concluded early July a joint development agreement for the interconnection of Hungarian and Romanian natural gas transmission systems, by building Arad-Szeged pipeline, scheduled to be finalized by 2010.

At first, natural gas would be transported from Hungary to Romania and later, technical conditions might be created for the transportation of natural gas from Romania to Hungary as well.

The pipeline will lead to the development of natural gas market in the eastern EU states, will diversify transport routes and resources and consequently will contribute to Romania’s and possibly Bulgaria’s energy safety.

Each of the two firms will build and operate their section of the pipeline independently. The expected cost of the Romanian investment is EUR35 million, which might vary depending on the negotiations with the Hungarian party.

MOL estimates its costs will reach EUR38 million, so that the investment in the networks interconnection will total some EUR73 million.