Crisis in the gas transmission system?

by Dumitru Chisalita

Was there a crisis in the Gas Transmission System in January 2016? If we consider TRANSGAZ communiques, the answer would be NO, but if we monitor the little information on TRANSGAZ’s website, the few remained, after erasing the mandatory data posted on company’s website on January 22nd 2016, the answer is categorically YES. Then, why this misinformation? Recently, we have been given TRANSGAZ as an example in the amazing step made by moving the Office from Medias to Bucharest. This amazing step is probably related to the fact that Transgaz’s Office in Bucharest ordered the acquisition, in January 2016, of gas from a supplier (100% GAZPROM capital) at prices up to 40% higher than the price in the external market! Probably the same proximity of offices in Bucharest to Transgaz’s Office in Bucharest has led to misinformation, hiding and erasing data on company’s website. The same proximity has probably determined in January 2016 an immaculate image across Romania: So that people don’t become alarmed! So that people don’t take the streets! The functioning of the Gas Transmission System involves the permanent existence of a gas amount in the system and the continuous acquisition by suppliers of amounts introduced in the system at the level of amounts which the same suppliers remove from the system and sell to consumers. If suppliers sell more than they buy, they sell a gas amount that does not belong to them (respectively, they sell from the gas amount from the transmission system, property of the transmission operator, or in other words they sell a commodity which is not theirs), but even more serious is that they seriously affect the functioning of the national transmission system. The gas transmission system cannot be operated normally if gas stored in pipelines, which ensure the continuous flow to the entry and exit from the system, is consumed by more than 20% of such gas. Analyzing Transgaz’s website, we notice that on 20-21 January 2016 consumption exceeded 20% (if we consider the reduction in gas amounts supplied to Brazi power plant, Iernut power plant and Electrocentrale Bucharest), so we can appreciate that there was a state of crisis in the transmission system (don’t mistake it with the emergency situation). The state of crisis in the transmission system was certain and determined by the indiscipline, actual refusal of certain suppliers to purchase gas which they sold on a daily basis. Given the crisis situation in the transmission system, legal actions had to be taken since 20 January 2016. Actions which involved two approaches, according to the Transmission Network Code (or articles that are not suspended, cancelled, amended) and other operational procedures:

• Reduction of supplies to suppliers that sold more gas than they purchased, respectively which sold gas that did not belong to them;
• Procurement of gas by Transgaz to hydraulically balance the gas transmission system.

What was actually done in this period is that there were daily press releases (in fact untruths) on Transgaz’s website: “rest in peace, people, don’t take the streets” and Transgaz has turned into a “good Samaritan” who bought gas for suppliers who wanted only to sell gas without purchasing it. The network code is a tool which can be applied only in a gentlemen’s market. Transparency, governance and listing on the exchange, all to ensure the right of public opinion to receive answers to a number of simple questions, which we expected: Why did Transgaz communicate during 20-26 January 2016 that there was no state of crisis in the NTS, when in fact there was? Why hasn’t Transgaz complied with the law and purchased gas on behalf of those who refused to purchase, without having the certainty of recovering the expenses with such gas? Who will pay the large prices of gas purchased by Transgaz from the Russians? Who will pay the 1,500 tons of heavy fuel oil used by Electrocentrale Bucharest, after the illegal reduction in gas supplies to this company in January 2016, when it committed to pay to Transgaz every hour, for 365 days, a fixed tariff (capacity tariff) to make sure that it has gas throughout the year?

Romanian version: http://dumitruchisalita.ro/2016/02/21/criza-in-sistemul-de-transport-gaze/

Image courtesy of John Kasawa at FreeDigitalPhotos.net