THE DEVELOPMENT OF THE ROMANIAN GAS TRANSMISSION SYSTEM ALONG BULGARIA – ROMANIA – HUNGARY – AUSTRIA ROUTE

(BRUA PROJECT, PHASE 1)

- CURRENT STATUS-

CESEC MEETING

February 2018

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Gas transmission pipeline Podișor –Recaș:

o Length: 479 kmo Pressure: 63 baro Diameter: Dn 800

Compressor stations:o GCS Podișor (Giurgiu County)o GCS Bibești (Gorj County)o GCS Jupa (Caraș-Severin County)

The pipeline route crosses the Counties:Giurgiu, Teleorman, Dâmbovița, Argeș,Olt, Vâlcea, Gorj, Hunedoara, Caraș-Severin and Timiș.

Investment value: 478,6 mil. Euro.

BRUA Project Phase 1 represents the construction of new gas transmission pipeline sections tofacilitate the connection between incumbent gas lines, from Podișor to Recaş, along Podișor-Corbu-Hurezani-Hațeg-Recaș and consisting of:

PROJECT DESCRIPTION

MAIN STEPS TAKEN IN PROJECT DEVELOPMENT

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Signing of Grant Agreement with INEA: September 2016

Final investment decision: December 2016

Environmental Agreement granted: December 2016

Long Lead Items (LLI) procurement start: December 2016

Construction Permit granted: February 2017

Signing of Pipeline Execution Contracts : November 2017

Signing of Compressor Execution Contract: March 2018

Signing of SCADA Contract: July 2018

Pipeline works start order: June 2018

Compressor Stations works start order: April 2018

PIPELINE EXECUTIONBackground data

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Pipeline construction between TN Podișor and TN Recaș is broken-down as follows: Pipeline execution of LOT 1 from KM 0 to KM 180 Pipeline execution of LOT 2 from KM 180 to KM 320 Pipeline execution of LOT 3 from KM 320 to KM 479 Pipeline automation and security LOT 4 is implemented for the entire route, from KM 0 to KM 479 Pipeline execution LOT 1 is carried out by the Association INSPET SA (Association leader) – PETROCONST

SA – ARGENTA SA – IRIGC IMPEX SRL – COMESAD RO SA, based on the Works Supply Contract No.601/28.11.2017

Pipeline execution LOT 2 is carried out by the Association HABAU PPS PIPELINE SYSTEMS SRL (Associationleader) – INSPET SA – IPM PARTNERS ROMÂNIA SA – PETROCONST SA – MOLDOCOR SA – ARGENTASA – ANTREPRIZĂ MONTAJ INSTALAȚII SA – ROMINSTA SA – COMESAD RO SA, based on the WorksSupply Contract No. 602/28.11.2017

Pipeline execution LOT 3 is carried out by the Association HABAU PPS PIPELINE SYSTEMS SRL (Associationleader) – IPM PARTNERS ROMÂNIA SA - MOLDOCOR SA - ANTREPRIZĂ MONTAJ INSTALAȚII SA -ROMINSTA SA, based on the Works Supply Contract No. 603/28.11.2017

Pipeline automation and security LOT 4 is carried out by the Association S&T ROMÂNIA SRL – ADREMENGINEERING SRL, based on the Works Supply Contract No. 585/24.07.2018

Additionally, pipeline execution also includes the pipeline materials and equipment purchased by Transgaz: Piping and bends Valves Insulating joints

PIPELINE EXECUTIONProcurement of piping and bends

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Piping and bends are supplied by TOSCELIK SPIRAL BORU URETIM SANAYI AS – Turkey,based on Contract No. 398/23.04.2018

The product manufacturing and supply order was launched on 12.05.2018 Production of spiral welded pipes begun on June 26, 2018. By December 31, 2018 there were

313.228 m of Ø813 pipes with various wall thickness, namely 66,50% of the pipes needed forthe Project.

NECESAR (m)

TOTAL REALIZAT

(m)Iunie Iulie August SeptembrieOctombrieNoiembrieDecembrie Ianuarie Februarie Martie Aprile Mai Iunie Iulie August SeptembrieOctombrieNoiembrie

321.856 208.835 4.458 5.357 25.556 22.718 23.937 55.674 71.135 - - - - - - - - - - - 29.119 13.772 - - 3.692 4.980 - 5.100 - - - - - - - - - - - -

120.031 90.621 - 13.193 1.694 9.441 28.487 18.434 19.372 - - - - - - - - - - - 471.006 313.228 4.458 18.550 30.942 37.139 52.424 79.208 90.507 - - - - - - - - - - - TOTAL

Tipodimensiune țeavă

Ø813 x 10 mmØ813 x 11 mm

Ø813 x 14,2 mm

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10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

90.000

100.000

4.458 5.357

25.556 22.718 23.937

55.674

71.135

- - - - - - - - - - -- -

3.692 4.980 -

5.100

-

- - - - - - - - - - --

13.193

1.694 9.441

28.487

18.434

19.372

- - - - - - - - - - -

PRODUCȚIA LUNARĂ DE ȚEAVĂ FABRICATĂ PE TIPODIMENSIUNI(metri liniari)

Ø813 x 10 mm Ø813 x 11 mm Ø813 x 14,2 mm

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BRUA Project Management Unit has expertprofessionals that permanently follow andmonitor the pipe production process in thefactory, as well as the inspections and tests

One of the key terms for successfulcompletion of the Project is the delivery intime and to quality specifications providedin the Project technical specifications

PIPELINE EXECUTIONProcurement of piping and bends

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Pipes are shipped by boat from Iskenderun Port to Constanța Port. Later on from Constanța Portpipes are either shipped by trucks directly to pipe yards, or shipped by barge to Orșova and thenby trucks to the pipe yards.

ISKENDERUN PORT

CONSTANTA PORT

ORSOVA PORT

PIPELINE EXECUTIONProcurement of piping and bends

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PIPELINE EXECUTIONProcurement of valves and insulating joints

First 56 valves were already received ina first batch out of which 8 pieces of Dn800 ANSI 400 block valves. All othervalves are currently in the manufacturingand assembly process (including FactoryAcceptance Test).

As per Contract, all 66 pieces of DN 800insulating joints have been received in the siteorganizations.

PIPELINE EXECUTIONPipeline construction LOT 1, LOT 2 and LOT 3

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The execution works for LOT 3 started in August 20, 2018. Works are ongoing for 11 out of 17sections (each section has a length of 5 km). Overall progress of execution works is 12%.

The execution works for LOT 1 started in September 2018. Works are ongoing for 6 out of 10sections. Overall progress of execution works for Lot 1 is 11%.

The execution works for LOT 2 started in September 2018. Works are ongoing for 15 out of 33section. Overall progress of execution works is 4%.

CONSTRUCTION OF COMPRESSOR STATIONSBackground Data

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Compressor stations will be constructed by the Association INSPET SA (AssociationLeader) – PETROCONST SA – MOLDOCOR SA – HABAU PPS PIPELINE SYSTEMS SRL– IRIGC IMPEX SRL – SUTECH SRL – TIAB SA – ROCONSULT TECH SRL, based on theWorks Supply Contract No. 333/23.03.2018

Works start order has been issued on April 16, 2018

The 3 compressor stations GCS Podișor, GCS Bibești and GCS Jupa will each have 2compressor units (an active one and a backup one)

Compressor stations are constructed by an epCC Contractor that is responsible for: Detail Engineering and technical assistance Procurement of all equipment and materials (save for compressor units that are

purchased directly by Transgaz) Construction of the 3 compressor stations Commissioning

CONSTRUCTION OF COMPRESSOR STATIONSPROCUREMENT OF COMPRESSOR UNITS

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The compressor units are supplied by the Association SOLAR TURBINES EUROPE SA –SUTECH SRL, based on Contract No. 428/August 24, 2018

The order for product manufacturing and supply was issued on 10.10.2017

All 6 compressor units as per Contract arealready installed.

In September 2018 the first 2 compressorunits for were received at GCS Jupa.

In October 2018 the 2 compressor unitswere received at GCS Podisor.

In November the 2 compressor units werereceived at GCS Bibesti.

CONSTRUCTION OF COMPRESSOR STATIONSPROCUREMENT OF COMPRESSOR UNITS

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TRANSGAZ representatives took part in the main factory testing: Turbine factory performance tests Package and no load string test Checking of control system Enclosure Assembly Static test CO2 discharge test

CONSTRUCTION OF COMPRESSOR STATIONSGCS Podișor

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Construction camp has been completed Foundations have been completed for the main equipment in the station (compressor units,

gas coolers, filter separators, scrubbers, exhaust vents, etc.) Civil works are undergoing at administrative building, workshop/storage building, electrical

building, compressor room and The 2 compressor units have been set on the foundation Progress: 43%

CONSTRUCTION OF COMPRESSOR STATIONSGCS Bibești

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Works have been initially slowed down due to archeological findings. Construction Camp is close to completion Foundations have been completed for the main equipment in the station (compressor units,

gas coolers, filter separators, scrubbers, exhaust vents, etc.) Civil works are undergoing at administrative building, workshop/storage building, electrical

building, compressor room The 2 compressor units have been set on the foundation Progress: 25%

CONSTRUCTION OF COMPRESSOR STATIONSGCS Jupa

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Construction camp has been completed Foundations have been completed for the main equipment in the station (compressor units,

gas coolers, filter separators, scrubbers, exhaust vents, etc.) The 2 compressor units have been set on the foundation Civil works are undergoing at administrative building, workshop/storage building, electrical

building, gas pressure reduction building Compressor room is finalized 90% Coolers are mounted on foundations Progress: 49%

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