ROMANIA SIBIUCounty, MEDIACity, C.I.MotaSquare,no.1 www.transgaz.

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PRESENTATIONSHEETOFTHE"SCADAIMPLEMENTATION"INVESTMENTPROJECT
1.BACKGROUND: 1.1Scopeofactivity: The scope of activity for TRANSGAZ SA is the transmission, dispatching and international transit of naturalgas,researchanddesigninthefieldofgastransmission.TRANSGAZSAisthetechnicaloperator of the National Transmission System (NTS) in Romania and is responsible for its operation under conditionsofquality,safety,economicalefficiencyandenvironmentalprotection. TherighttooperatetheNTSwasgrantedtothecompanybytheNationalAgencyforMineralResources basedontheConcessionAgreementsignedforaperiodof30years(20022032)andtheTransmission Licenseno.40datedJanuary17th2001,validfor15years. 1.2Associationswithothertradingcompaniesorpartnershipsinjointventures: InFebruary2004aStudyCompanywasestablishedNABUCCOCompanyPipelineStudyGmbH,with theheadquartersinVienna,Austria,havingasshareholdersbothTransgazSA,andotherfourcompanies involved in the gas transmission activity, that is: BOTAS, Turkey, BULGARGAZ EAD, Bulgaria, MOL, Hungary, OMV Gas, Austria. On October 12th, 2005 the Austrian Register of Commerce registered the changing of the companys name from NABUCCO Company Pipeline Study GmbH to NABUCCO Gas PipelineInternationalGmbHandtheextensionofitsscopeofwork.OnFebruary5th,2008withinthe NABUCCO Extraordinary General Assembly of the Shareholders, the accession papers of new shareholders,i.e.RWEGasMidstreamGmbH,headquarteredinGermany,weresigned. 1.3Shareholdingstructure Sharecapital: 73,51%RomanianstatethroughtheMinistryofEconomy,TradeandBusinessEnvironment 15%PROPRIETATEASAFund 11,49%FreefloattradedonBucharestStockExchange The Ministry of Economy Trade and Business Environment, as the main shareholder representing the stateinTRANSGAZSA,exercisesallrightsderivingfromsuchcapacity.

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PRESENTATIONSHEETOFTHE"SCADAIMPLEMENTATION"INVESTMENTPROJECT

1.4IncorporationDate: The National Gas Transmission Company, TRANSGAZ S.A. was founded based on Decision no. 334/04.05.2000 of the Romanian Government on the restructuring of the National Gas Company ROMGAZ SA. Following such restructuring, by the accounting unbundling of the regulated gas transmissionactivityunderArticle101(1)offurtheramendedandsupplementedGasLawno.351/2004, approvedwithintheShareholdersExtraordinaryGeneralAssemblyno.9datedJuly26th,2007, TRANSGAZactivityisperformedby10GasTransmissionRegionalOperatingCentre,outofwhich1isthe centerfortransitactivity,independentdivisions,directionsanddepartments. 1.5Descriptionoftheinvestmentplacementandfacilities: AcrossRomania. 2.BASICECONOMICDATA: 2.1Sharecapital:lei117,738,440(onDecember31st,2009) 2.2Turnover:Lei1,187,350,293(onDecember31st,2009) 2.3Productioncapacitiesandtheirusagedegree: TRANSGAZ SA is the operator of the National Gas Transmission System (NTS) across Romania. The National Transmission System (NTS) has over 13,110 km in trunk pipelines with diameters ranging between 50 mm and 1200 mm, 6 compressor stations for gas transmission, about 1060 regulating metering stations 942 cathode protection stations, and 732 gas odorization stations. TRANSGAZ SA is also the operator of the international transit system on the Romanian territory, operating a DN 1000 pipeline and 2 DN1200 pipelines, both being190km long, through which the gas transit isconducted fromtheRussianFederationtootherBalkanandSouthEasterEuropeancountries. 2.4No.ofemployees:4990(onDecember31st,2009) 3.MARKET: Domestic: According to the provisions of the current legislation, TRANSGAZ SA assures the non discriminatory access to NTS of all economic agents, within the limit of available capacities, based on tariffs in consideration for gas transmission services, according to methodologies set by the National EnergyRegulatoryAuthority(NERA). External:Thecurrenttechnicalcapacityforimportinggasisofabout12.78bcm/yearthroughISACCEA (South East of Romania) and SATU MARE (North of Romania), but the quantities imported so far are undertheabovementionedtechnicaltakingovercapacity. 4.SUPPLYOFRAWMATERIALANDEQUIPMENT: The raw materials and the equipment necessary for TRANSGAZ activity are mainly of domestic origin. Stateofart equipment and installations specific to TRANSGAZ gas transmission activity are purchased fromabroad. 5.ACKNOWLEDGEMENTSBYINTERNATIONALFINANCIALOGANIZATIONS: TheoilandgassectorhasbenefitedfromthefinancialsupportoftheWorldBank,followingtheloanfor structural adjustment which makes the object of the Loan Agreement concluded in 1994 between the RomanianGovernmentandIBRDfortheFinancingoftheProjectforRehabilitationandRestructuringof theRomanianOilSector.

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PRESENTATIONSHEETOFTHE"SCADAIMPLEMENTATION"INVESTMENTPROJECT

In2007,StandardandPoorsRatingAgencyratedTRANSGAZtoBB+positiveoutlook;inFebruary2008 SNTGNTransgazS.A.wasratedtoBBBnegativeoutlook,reachingtheinvestmentgradelevel;andin October2008,asaresultofthedowngradingoftheRomaniascountryrating,SNTGNTransgazS.A.was ratedtoBB+negativeoutlook.Asaresultoftheauditingprocesscarriedoutonwithintheyear2010, Standard & Poors Rating Agency rated Transgaz S.A. to BB+ negative outlook for loans in foreign currency and BBB negative outlook for loans in national currency. Transgaz rating has remained unchangedundertheconditionsinwhichRomaniasratinghasbeenkeptatthesamelevel. 6.PROJECTOBJECTIVE: 6.1Projectdescription: TheimplementationoftheSCADASystemisabindingobligationprovidedassuchinArt.25ofGasLaw no.351/2004. Transgaz isthe technicaloperator of the NationalGas Transmission System in Romania. TheimplementationoftheSCADASystemwillprovideTransgazthepossibilitytomonitorindetailandin due time the network operation. It will also improve Transgaz capacity to command and timely and efficientlyrespondtoanypotentialactivityinterruptionrisk.TheSCADASystemthatwasdevelopedfor Transgazwillsubstantiallycontributetotheincreaseoftheoperationsafetyandtotheimprovementof thecompanysfinancialandoperationalmanagement.Theobjectoftheprojectistheimplementationof aSCADASystemfortheRomanianNationalGasTransmissionSystem.TheSCADAsystemincludesthree maincomponents: FieldinstrumentationandtheRemoteTerminalUnits; SCADAhardware&software; Telecommunicationsystem. ThefutureSupplierwillbeboundtodeliveraturnkeySCADASystemanditwillalsoberesponsiblewith theintegrationofallsystemcomponentssothat,attheendoftheimplementationstages,toachievea fully functional SCADA System. The SCADA System will cover the following locations: domestic production entry points (MP) 143; Import entry points (GMS) 2; Underground storages8; Exit points (RMS)948;Compressorstations(GCS)6;Internationaltransitpoints2;Technologicalhubs(TH)39;Line valvesalongthepipelinesroute106TOTALno.ofpoints1254 For the domestic production entry points into the National Transmission System the data will be requestedtotheproducerscentraldispatchingcenters. 6.2StudiesdrawnuptosupporttheProject: By PHARE 2005 Program the European Commission approved the financing of the Technical and EconomicStudyofaSCADASystemforthegasnetwork.ThestudywaselaboratedbetweenMay2007 and March 2008, based on the consultancy supply contract RO 2005/017553.03.10.1.1, concluded between the Central Contracting and Financing Unit of the Finances and Economy Minister as ContractingAuthority,ononehand,andAETSApplicationEuropeandeTechnologiesetdeServices,in consortiumwithRENCOS.P.AandSEICS.R.L.asConsultant,ontheotherhand. The Implementing Authority was established within the Finances and Economy Minister and the BeneficiaryofthisstudyisTRANSGAZ.ThefinalresultofthestudywastheelaborationoftheDataSheet fortheprocurementoftheSCADASystem.In2009,becauseofthenewproceduresregardingprojects submitting, a new feasibility study was elaborated by SC AVANTERA SRL at the request of the SNTGN TransgazSArepresentatives.

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PRESENTATIONSHEETOFTHE"SCADAIMPLEMENTATION"INVESTMENTPROJECT

6.3Estimatedprojectduration: Theestimatedprojectdurationis2yearsstartingwithJune2009. 7.ESTIMATEDVALUEOFTHEPROJECT: 7.1Estimatedrequirementstofinancetheinvestment: 36Millioneuro. Theowncapital/loansreportwillbe:75%loans,25%ownfundsforeligiblecostsoftheproject. 8.PRODUCTIONCONSEQUENTLYTOTHEPROJECTFULFILMENT: Notapplicable 9.ENVIRONMENTALPROTECTION: Among the benefits of the SCADA Project we mention the decrease of the technological consumption, respectively gas leakage, through a better network management. The direct benefit is the decrease of thegreenhousegasemissionlevel(mainlymethaneinourcase). 10.CONCLUSIONSONPROJECTIMPLEMENTATIONEFFICIENCY: 10.1Economiceffects: By implementing the SCADA Project we forecast a decrease of the maintenance and operation costs. Since the impact on the staff is difficult to predict, we assume that the impact will only cast on the materialcostsincludedintheforecastonTransgazoperationalandmaintenancecosts.Accordingto the costbenefits assessment performed by the Consultant who elaborated the Study a prudent 1% decreaseofthecostsisforeseenattheendoftheimplementationperiod.Thecorrespondingbenefits mayregistera1.5%annualincreaseafter2013,followingthusthetrendoftheforecastedtransmission activity. Off course, the decrease of the technological consumption the SCADA Project is only partly responsible for this decrease, and the Projects contribution to this decrease is related to the new instrumentationtobeprocuredandinstalled. 10.2Periodofloanandsourcesreimbursement: 10.3Durationofinvestedfundrecovery: 10.4Otherdataonthereckonedefficiencyoftheproject: FlorinCOSMA DirectorGeneral Company:SNTGNTRANSGAZSA Phone:+40269803333;Fax:+40269839031 Address:Medias,no.1C.I.MOTASSquare. 551130Medias,SibiuCounty

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PRESENTATIONSHEETOFTHE"SCADAIMPLEMENTATION"INVESTMENTPROJECT