Interconnection between the ROMANIAN and the BULGARIAN Gas Transmission Systems Project implemented by TRANSGAZ Romania & BULGARTRANSGAZ - Bulgaria

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2016 Interconnection between the ROMANIAN and the BULGARIAN Gas Transmission Systems Project implemented by TRANSGAZ Romania & BULGARTRANSGAZ - Bulgaria Implementation STAGE Romanian section

1 THE INTERCONNECTION OF THE ROMANIAN AND THE BULGARIAN GAS TRANSMISSION SYSTEMS, RUSE-GIURGIU DIRECTION Action EEPR-2009-INTg-RO-BG Subactions SI2.569565, SI2.569582 SCOPE Action To ensure the interconnection between the Romanian and the Bulgarian gas transmission systems. Sub-action 1 - (SI2.569565): Construction and commissioning of the bi-directional Gas Metering Stations (GMSs) - Giurgiu (Romania) and Ruse (Bulgaria). Sub-action 2 - (SI2.569582): Construction and commissioning of the pipeline interconnecting the gas metering stations Ruse and Giurgiu together with the related facilities.

2 TECHNICAL DATA: Maximum transmission capacity = 1.5 bcm/y Operating capacity = 1.5 bcm/y Minimum transmission capacity = 0.5 bcm/y Maximum design pressure = 40 bar Operating pressure = 21-40 bar Minimum border delivery pressure = 21 bar Pipeline nominal diametre = DN 500 Total length between Giurgiu GMS and Ruse GMS = approx. 25 km The length of the Romanian pipeline section is approximately 8 km, out of which: the land section approx. 5 km + 2 Danube undecrossing pipelines (main and the back-up approx. 1.5 km each Romanian section).

STATUS 3 Subaction 1: Construction of Giurgiu GMS (Romania) and Ruse GMS (Bulgaria) Giurgiu GMS - finalized PIG launching/receiving trap Metering lines Gas filtering system

Subaction 2: Construction of the pipeline interconnecting Ruse GMS and Giurgiu GMS LAND SECTION between GMS Giurgiu and the valve assembly on the Romanian Danube bank approx. 5 km 4 Land pipeline section + fiber optics + valve assembly = FINALIZED Land pipeline section Fiber optics towed in protection pipe Valve assembly

5 DANUBE UNDERCROSSING Main pipeline to under-cross the Danube through the drilling hole = FINALIZED MAIN PIPELINE Length: 2,100 m - Butt welded and coated in full line - Supported on the rolling track - Prepared to be towed into the Danube bottom The main pipeline on the Romanian territory prepared to be pulled into the Danube bottom

6 Danube undercrossing FIBER OPTICS into the protection pipe = FINALIZED Fiber optics into DN150 protection pipe undercrossing the Danube between the two banks Length: 2,080 m Horizontal Directional Drilling equipment drilling for fiber optics pipe towing

7 DANUBE UNDERCROSSING BY HORIZONTAL DIRECTIONAL DRILLING IN DELAY DN500 Danube undercrossing pipelines (main and back-up) The initial deadline for works completion, i.e. 31.12.2013 was missed, because of unpredictable occurrences. Drilling bit (500 enlarger) drilling works to tow the main pipeline

8 SUMMARY OF THE REASONS FOR DELAY DN 500 Main and Back-up Pipelines The complicated geological structure, mainly on the Danube bottom section to be crossed by Horizontal Directional Drilling (see slide 9), produced significant delays as a result of unpredictable factors, precisely: - Considerable loss of drilling mud (up to approx. 100%) through the cavities to be crossed - Stuck drilling equipment on account of the rough limestone beds - Caving-in of the drilling hole because of the decayed soil and sand The project s budget - All such unpredictable factors generated considerable costs for the Constructor - As costs were not budgeted, the Constructor ran into financial difficulties TRANSGAZ and BULGARTRANSGAZ terminated the contracts with the Constructor Association for the Danube undercrossing works, as of 01.02.2015;

MAIN ACTIONS TAKEN FOR PROJECT COMPLETION 9 The estimated value for the construction of the Main and Back-up pipelines for undercrossing the Danube river, was re-assessed; TRANSGAZ and BULGARTRANSGAZ successfully finalized new public procurement procedures for the construction of the Danube undercrossing pipelines; Works for the Danube undercrossing with the two pipelines (Main and Backup) are underway; According to the provisions of the Commission Decision C(2010) 5962 final dated 06.09.2010, the European Commission accepted a new extension of the period covering the eligibility of the costs related to the project Interconnection Bulgaria-Romania until 31.12.2016

11 Route of Interconnection Bulgaria - Romania http://new.transgaz.ro/en/activitati/bulgaria-romania-interconnection