Can you give a brief overview of Depogaz and the position it plays in the energy industry?

Depogaz was established in 2018 when Romgaz separated its storage operations from its production, transportation, and distribution operations in accordance with European Directives 2009/73/EC and Law 123/2012 Art. 141. In the Romanian energy system, as a corporation, we play a strategic role. At the European level, our function is much more expansive. We are in a strategic geographic location, and our five deposits have a combined storage capacity of 2,8 billion cubic meters, with a daily injection rate of 20 million cubic meters and a daily withdrawal rate of 30 million cubic meters.

All of the gas storage facilities we manage in Romania were constructed inside of formerly active, exhausted gas fields. Based on reservoir studies, it was established that the corresponding fields might be converted into storage units if they reached a certain quota. The primary need for such areas is that the storage place be a sealed trap to prevent any energy loss. There are many benefits to using this method, including the fact that we have a thorough understanding of the porous and permeable space that has been in use and that we are aware of the issues that have previously arisen, giving us better insight into how to avoid them from happening again during the storage process.

What prompted Depogaz to pursue a strategy of regional expansion?

Our regional objectives are strongly related to initiatives taking place in other facets of the market, particularly those involving the National Transmission System (NTS). The NTS must be geographically connected and, from a technical standpoint, match the integrated European system in accordance with EU Directives. We met with Transgaz multiple times to discuss development plans in order to incorporate this information into our own strategy for growth.

For instance, BRUA will take over the delivery of Black Sea gas extraction volumes and link the area. Given the potential role we can play within the greater European environment, this gives us with a chance to expand regionally. We already have a few target markets in mind, including Serbia, Ukraine, and the Republic of Moldova (where Transgaz now manages the country’s transportation infrastructure). Given that they lack substantial fields, both in terms of exploitation and storage, Bulgaria is another potential partner. Although there are many prospects, it is now crucial that all parties engaged carry out their investment initiatives in the particular industries in which they are active.   

There is very little competition on the Romanian market in the gas storage segment. Why do you think that is?

We welcome competition, the more players in the market the more dynamic the environment. There seems to be a stagnation of this sector at European level though, likely influenced by the fact that it involves very high investments and rather low profit margins. A study is in fact underway at EU level and is looking to understand what has been holding back the development of this sector.

We also wish to see more players in the local market because competition spurs better services and new ideas. Meanwhile we keep an eye on regional and European tendencies, to modernize existing natural gas storage capacities and to create an increased degree of flexibility, including by using multi-cycle storage capacities. This is a service that we integrated already, which means at present we allow withdrawals even during injection seasons. 

What are your plans for Depogaz in the next three to five years?

We aim to become a key regional player while not neglecting the local market. There’s room for growth in our current circumstances. We plan to expand our gas storage capacity to reach 4.5 billion cubic meters and grow our injection capacity to 30 million cubic meters per day, with a withdrawal capacity of 42-44 million cubic meters. Our development plan for 2019 to 2023, incorporated in the NTS strategy for development, includes increasing withdrawal and gas storage capacity to reduce dependence on external sources, increasing stability and security of energy supply.

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