Romania's gas distributor Transgaz sees profits shrinking because of new tax and provision for Nabucco pipeline

Romania gas distribution company Transgaz upped its revenues by 5.3 percent in the first nine months of the year to some EUR 242 million. Its net profit, however, has dropped, by 37 percent, to some EUR 36 million compared to the same period of 2012. The company saw its total expenses soaring by 16.4 percent in the first nine months of the year, following the application of the tax on natural monopoly applicable to electricity and gas sectors. The expenses were also upped by a provision of some EUR 24 million to cover its contribution in the consortium to build the Nabucco gas pipe. Transgaz' expenses during this period were of some EUR 183 million. Earlier this year, OMV announced the gas pipeline project Nabucco West was not selected by the Shah Deniz II consortium as their preferred gas transportation route to Europe. This means that gas from the Caspian bedding Shah Deniz II will not travel to Europe via the Nabucco pipe, the 1,300 kilometer pipe which was supposed to connect Bulgaria to Austria via Romania. Ten years from when the first preparations were made for this gas inter-connection, Romanians pundits say Romania stands to lose from this decision, starting with the transport tariffs which could have been gained, to the ten years of investments in the project. Much of the 1,300 kilometers of the gas pipe would have crossed Romanian territory – some 475 kilometers. Transgaz is listed on the Bucharest Stock Exchange where it currently has a capitalization of some EUR 500 million. editor@romania-insider.com