Romania's Transgaz borrows EUR 44 mln to consolidate transfer capacity to Moldova

Romanian gas transport system operator Transgaz has contracted a one-year loan to finance investments in northeastern Romania and ensure its transfer capacity towards the Republic of Moldova - where it owns and operates through Vestmoldtransgaz a pipeline from Iasi-Ungheni cross-border interconnector to Chisinau industrialized area.

Rather strategic, the investments carried out by Transgaz with the aim of providing natural gas to Moldova remain financially uncertain yet. On the upside, the European Bank for Reconstruction and Development (EBRD) remains a partner of the company in Moldova, and the European Union has financially supported the projects.

Transgaz has now signed a loan agreement worth RON 220 mln (EUR 44 mln) with Banca Comerciala Romana (BCR - Erste Bank Group), which will be due within 12 months. The loan aims at financing and refinancing an investment project of Transgaz, respectively Developments in the North-East area of Romania to improve the natural gas supply of the area and ensure the transport capacities to and from the Republic of Moldova, Profit.ro reported.

Transgaz has been able to send 5 mln cubic meters of natural gas to Moldova through the Iasi-Ungheni interconnector since October 1 this year. The project was commissioned last year when the capacity in the Romania-Moldova direction was 1.5 mln cubic meters per day.

Moldova is currently seeking ways to decrease its dependence on Russian natural gas transferred through Ukraine after Gazprom threatened not to renew the long-term contract. However, after renewal, the Russian company is delivering gas at prices significantly below the market levels, making the deliveries from Romania still unlikely.

The utilization of the whole infrastructure built by Transgaz, partly with financial support from the European Union, remains consequently uncertain.

(Photo source: Inquam Photos/George Calin)