EC accepts Transgaz commitments for unrestricted natural gas exports from Romania

The European Commission has accepted the commitments proposed by Romania's gas pipeline operator Transgaz to allow gas exports from Romania, this being a step forward towards a single European energy market, the EU Executive said in a release on Friday.

"Transgaz has committed to make available capacities at interconnection points for increased natural gas exports from Romania to Hungary and Bulgaria. This will promote the free flow of gas at competitive prices in South Eastern Europe and is a further step towards a single European energy market. Consumers across the region will benefit from greater security of supply of a key transition fuel towards the ultimate objective of an emissions free energy mix, in line with the European Green Deal," said Executive Vice-President Margrethe Vestager, in charge of competition policy.

In June 2017 the Commission announced a formal investigation to determine whether the state-controlled Transgaz had infringed EU antitrust rules by restricting exports of natural gas from Romania. In particular, the Commission was concerned that Transgaz may have carried out such restrictions by: underinvesting in or delaying construction of infrastructure for gas exports; interconnection tariffs for gas exports that made exports commercially unviable; using unfounded technical arguments as a pretext for restricting exports.

"These restrictions may have maintained or created barriers to the cross-border flow of natural gas from Romania, one of the EU's largest natural gas producers, to Hungary and Bulgaria, contrary to the objective of an integrated Energy Union where energy flows freely across borders directed by competitive forces and based on the best possible use of resources. Following the opening of the formal investigation, Transgaz offered commitments to address the Commission's concerns. The Commission subsequently consulted market participants to verify whether the proposed commitments would remove the competition concerns identified by the Commission. In light of the market test, Transgaz has made some amendments to its proposed commitments. The final commitments will ensure that market participants can access significant volumes of export capacities via the interconnection points between Romania and neighbouring member states," the release states.

Specifically, Transgaz has committed: to make available minimum export capacities of 1.75 billion cubic metres per year at the interconnection point between Romania and Hungary (Csanádpalota). This capacity is equivalent to around one sixth of Hungary's annual gas consumption; to make available minimum export capacities totalling 3.7 billion cubic metres per year at two interconnection points between Romania and Bulgaria (Giurgiu/Ruse and Negru Voda I/Kardam). This capacity covers more than half of Bulgaria and Greece's annual gas consumption; to ensure that its tariff proposals to the Romanian national energy regulator ANRE will not discriminate between export and domestic tariffs in order to avoid interconnection tariffs that would make exports commercially unviable; to refrain from using any other means of hindering exports.

The final commitments provide for significant additional capacity compared to the market-tested commitments, in particular to Hungary, by including capacities envisaged for the Romanian section of the first phase of the Bulgaria-Romania-Hungary-Austria (BRUA) gas pipeline project. As a result, Transgaz's participation in this project will also be subject to legally binding deadlines.

The commitments will remain in force until 31 December 2026, and a trustee will be in charge of monitoring the implementation and compliance with the commitments.

"The Commission has concluded that the amended commitments address the identified competition concerns and therefore has made them legally binding on Transgaz," the release states.

Article 9 of the EU's Antitrust Regulation (Regulation 1/2003) allows the Commission to conclude antitrust proceedings by accepting commitments offered by a company. Such a decision does not reach a conclusion on whether EU antitrust rules have been infringed but legally binds the company to respect the commitments. If Transgaz were to breach the commitments, the Commission could impose a fine of up to 10 percent of the company's worldwide turnover, without having to prove an infringement of EU antitrust rules.