"Romgaz" getting ready to buy natural gas from the Vienna natural gas exchange

• The company has already imported natural gas, as a test, through the Szeged-Arad pipeline, from "Mol Energy"

The management of "Romgaz" is hoping that the company will become an active player on the Natural Gas Exchange of Vienna, from which it hopes to buy natural gas starting with June-July 2011, if this solution proves economically viable.

The acquisition of natural gas from the Western markets could prove an alternative to the imports from Eastern Europe or it could help reduce the volume of natural gas purchased from Russia, but this will only happen if the price will be lower than the one at which Russian gas is sold. Once bought from the West, the natural gas could enter Romania through the Szeged-Arad pipeline, which became operational at the end of July 2010.

"We have performed all due diligence to become active on the natural gas exchange of Vienna. As a test, < Romgaz > imported a small amount of gas through the Szeged-Arad pipeline. We want to start buying gas on the exchange, but there are still some financial and technical difficulties to overcome. We had concrete talks with the people in Vienna, but we do not rule out other exchanges. We just need to weigh the benefits and drawbacks. You will see that < Romgaz > will become a totally changed company", said Francis Toth, the deputy managing director of "Romgaz".

• Romgaz" official: "The listing on the Bucharest Stock Exchange - at best an image improvement"

"Romgaz" is one of the companies whose 2011 listing on the Bucharest Stock Exchange is eagerly awaited, as the talks for the listing of a stake in the company began approximately five years ago. The Government Decision which approves the sale of a 15% stake in Romgaz on the Stock Exchange was recently published in the Romanian Official Gazette. Together with the Ministry of the Economy, the Proprietatea Fund hold approximately 15% of the company.

However, unlike "Transgaz", which raised more than 60 million Euros from the sale of 10% of its shares on the Stock Exchange, which it later used for investments, "Romgaz" will not receive any money from its listing on the Stock Exchange.

"It is the Romanian state, and not < Romgaz > that will be the real beneficiary of the sale of the 15% stake on the exchange, since it is the former that will receive the money. The company will perhaps benefit in terms of its public image", said Francisc Antal, the deputy general manager of "Romgaz". Antal is optimistic that the listing will finally go through, even though the previous attempts to list the company never materialized.

"I am convinced that the plan to sell 15% of < Romgaz > on the Bucharest Stock Exchange will come through this time. In 2005, the company only had a single shareholder, the Romanian state, whereas now, there is also the Proprietatea Fund... it"s all up to the will of the shareholders", the managing director of "Romgaz" said.

In the first six months of 2010, the company posted a gross profit of 377 million lei, for a turnover of 1.8 billion lei.

• Nine projects for gas storage, presented to "Gazprom"

Even though the interest of Gazprom in using the natural gas storage area of "Roman" Mărgineni seems to have dwindled, amid Romania"s dropping demand for natural gas, when compared to the forecasts, the officials of "Romgaz" are trying to keep the discussions with the Russian open.

"A partnership involves the will of both parties involved. No one builds anything just for the sake of it. Whereas in 2000, it was forecasted that the natural gas market would reach 20 billion cubic meters a year, we now see that market demand is around 13-14 billion cubic meters. The development of a project should also take into account the existing market", said Dumitru Rotar, the head of the exploration-production division of "Romgaz".

The managers of "Romgaz" recently presented their "Gazprom" peers with a project to develop nine natural gas storage areas in Moldavia, with the Russians set to review them and to provide an answer. The "Romgaz" officials declined to disclose the capacity of the nine areas, citing the confidentiality of the discussions they are having with the Russian negotiators.

• "Romgaz", interested in exploiting Iraqi natural gas

The management of "Romgaz" had several rounds of negotiations with officials of the Ministry of Resources of Kurdistan, for concessioning several perimeters for exploitation. The official of "Romgaz" said that for now, they are reviewing several sets of technical data that they have received from Kurdistan before making a decision.

"I do not know if we will succeed in getting any concrete results or not. We are reviewing the technical data that we have received from Kurdistan, but we also have to consider the safety aspects of working over there, the political stability of the region and of the country. The concessioning of the perimeters involves participating in an auction or negotiating directly with the Kurdish partners. It is a rather awkward process", explained Francisc Antal, the deputy general manager of "Romgaz".