Romania: BRHA pipeline may increase the gas transmission fees

, SEE Energy News

The costs of transporting gas paid by end consumers might increase by 25-30 %, as the investment in the Bulgaria-Romania-Hungary-Austria (BRHA) gas pipeline must be amortized, and the pipeline risks remaining empty in the next period, said energy expert and former Minister of Energy Razvan Nicoleascu.

He reminded that the first phase of the BRHA pipeline has been completed. Transgaz has done a good job operationally in carrying out this project, without exceeding costs or major delays. However, the impact of this investment on the Romanian economy is not clear yet.

According to him, unfortunately Romania did not make enough efforts for the interconnections between Greece and Bulgaria to take place at the same time as the completion of the first phase of BRHA project, although the commitments have been assumed by everyone.

The European Commission has also not been uncompromising in its compliance with European commitments and legislation. Under these conditions, the risks of this pipeline remaining empty increase, especially since Romania will not have any significant production in the Black Sea in the next five years. In this undesirable case, the transport costs paid by end consumers could to increase by about 25-30 % because the amortization of BRHA cannot wait and will start soon, Nicolescu concluded.

The project, which connects Bulgaria, Romania, Hungary, and Austria, will increase Romania’s natural gas export and import capacity to Hungary to 1.75 billion cubic meters per year and the export capacity to Bulgaria to 1.5 billion cubic meters per year. The first stage’s cost amounted to 479 million euros, out of which 179 million euros came from the EU grant, while the rest was financed by natural gas transmission system operator Transgaz.

In June 2018, Transgaz has started the construction of the first phase of BRHA gas pipeline. Initial completion date of the first phase of BRHA gas pipeline was December 2019.