1. 1 Natural Gas Transmission within Romanian Gas Market BLACK SEA ENERGY CONFERENCE 3-5 April 2006, Bucharest, Romania

2. 2 April 3 rd, 1914 Finalization of the first pipeline from Sarmasel deposit to Turda (a town in Cluj county) 1925 First natural gas regulating-metering-delivery station in the distribution system, mounted at Mediaş 1928 Finalization of the mounting of the natural gas compressor station at Sarmasel – first station mounted in Europe SIGNIFICANT MOMENTS IN THE HISTORY OF GAS TRANSMISSION

3. 3 TRANSGAZ S.A. – GENERAL INFORMATION The National Gas Transmission Company TRANSGAZ S.A. has been established based on the Governmental Decision no 334 /2000, further to the restructuring of the former vertically integrated National Gas Company ROMGAZ S.A.; The share capital is entirely held by the Romanian State, as the sole shareholder, represented by the Ministry of Economy and Trade; TRANSGAZ S.A. is the technical operator of the national gas transmission system ( the Transmission System Operator); The main object of activity is gas transmission, dispatching, international gas transit, research and design in relation to gas transmission; TRANSGAZ S.A. has two subsidiaries: The Natural Gas Transmission Subsidiary Medias; The Research and Design Subsidiary for Natural Gas Transmission Medias

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5. 5 THE NATIONAL GAS TRANSMISSION SYSTEM INFRASTRUCTURE Over 12 000 km of transmission pipelines with diameters between 6 and 40 568 km of international transit pipelines on the Romanian territory with diameters between 40 şi 48 2 import metering stations 6 gas compressor stations 847 regulating and metering stations over 800 cathode protection stations

6. 6 Transmission capacity: 30 bcm/year Gas transported in 2004: 15.7 bcm Gas transported in 2005: 15.6 bcm Pipeline diameters: 6 to 40 Operating pressure: 6 to 40 bar THE NATIONAL GAS TRANSMISSION SYSTEM

7. 7 THE MAIN OBJECTIVES OF COMPANY STRATEGY The continuous rehabilitation and modernisation of the National Gas Transmission System; Development into new consumption areas; Development of the infrastructure required by the diversification of import supply sources; Development of the international gas transit activity on the Romanian territory.

8. 8 THE SPECIFIC OBJECTIVES OF COMPANY STRATEGY DEVELOPMENT AND MODERNIZATION OF NGTS Rehabilitation of the main pipelines Development into new consumption areas Optimizing the gas flow rates for regional consumers Implementation of the SCADA system INCREASE OF THE GAS IMPORT OFFTAKE CAPACITY Interconnections of NGTS with the systems in the neighbouring countries and The European System Diversification of import gas supply sources DEVELOPMENT OF CAPACITY FOR GAS TRANSIT Development of transit infrastructure for gas transit from Russian Federation to Turkey Development of new gas transit route

9. 9 DEVELOPMENT AND MODERNIZATION OF NGTS DEVELOPMENT NGTS extension into new consumption areas Increase of gas supply security Pipelines for improvement of supply in the region where deficits are being registered, especially during the cold season Delimitation of a high pressure network on the main gas flow directions, in order to maintain the optimal condition for gas delivery REHABILITATION AND MODERNIZATION Rehabilitation of the main pipelines - Approximately 4000 km from the entire system are older than 30 years, generating interruptions for maintenance, with a negative impact on the environment Modernization of metering, dispatching and odorizing systems

10. 10 INCREASE OF GAS IMPORT OFF-TAKE CAPACITY (1) – gas sources for Romania 2007 – 2008 Russian Federation Western Europe 2011 – 2030 Russian Federation Western Europe Caspian Sea Area Middle East Legend: Existing import points Under construction Future Project

11. 11 INCREASE OF GAS IMPORT OFF-TAKE CAPACITY (2) INTERCONNECTIONS OF NGTS WITH THE SYSTEMS IN THE NEIGHBOURING COUNTRIES Cernauti (Ukraine) – Siret (Romania): improvement of gas supply in north east of Romania Interconnection with Bulgarian network: improvement of gas supply in south of Romania DIVERSIFICATION OF GAS SOURCES FROM IMPORT Szeged (Hungary) – Arad (Romania): interconnection with European network, diversification of import gas sources

12. 12 DEVELOPMENT of CAPACITY for GAS TRANSIT (1) THE INTERNATIONAL TRANSIT OF RUSSIAN GAS ON THE ROMANIAN TERRITORY TO BALKAN STATES DN 40 x 55 bar, transmission capacity: 8 billion cm/year, for gas transit to Bulgaria (operational since 1974) DN 48 x 54 bar, transmission capacity: 10 billion cm/year, for gas transit to Turkey, Greece and other Balkan countries (1989) DN 48 x 54 bar, transmission capacity: 10 billion cm/year, for gas transit to Turkey, Greece and other Balkan countries (2002)

13. 13 DEVELOPMENT of CAPACITY for GAS TRANSIT (2) DEVELOPMENT OF TRANSIT INFRASTRUCTURE FOR GAS TRANSIT FROM RUSSIAN FEDERATION TO TURKEY

14. 14 The project has been initiated with the participation of five gas companies: OMV (Austria), MOL (Ungaria), TRANSGAZ (România), Bulgargaz (Bulgaria), BOTAS (Turcia) Nabucco Project - transit of natural gas from Caspian Sea and Middle East area to the European gas market Total pipeline length: app. 3280 km; Capacity in Turkey: 25,5-31 billion cm/year; Expected off-take in transit countries: 12-15 billion cm/year; Cost estimativ: cca. EUR 4,6 billion