DEPOGAZ is the main underground natural gas storage operator in Romania, with a share of approximately 90% of Romania's active storage capacity.
Can you briefly introduce Depogaz and the role it holds in the energy industry matrix?
Depogaz was created last year, in 2018, when Romgaz unbundled its storage activities in accordance with European Directives 2009/73/EC and Law 123/2012 art 141 that stipulated the need to separate storage operators from those of production, transport and distribution. As a company we hold a strategic role in the Romanian energy system, and an even broader role at European level. We are located in a favorable geo-strategic location and our five deposits can hold 2,8 Bn cubic meters, with a rate of injection of 20 M cubic meters per day, and an withdrawal rate of 30 M cubic meters per day.
All the gas storage facilities we operate in Romania are built inside depleted gas fields that have previously been in operation. When they reached a certain quota and based on reservoir studies it was determined that the respective fields can be transformed into storage units. The essential criterion for such spaces is that the storage location is a sealed trap so that any loss of energy is eliminated. There are a lot of advantages to this method: u we have an accurate understanding of the porous and permeable space that has been in operation ande we are aware of the problems that occurred in the past, so we have better knowledge about how to prevent their reappearance during the storage process.
What prompted Depogaz to pursue a strategy of regional expansion?
Our regional goals are closely linked to projects that are underway in other sectors of the industry, in particular those related to the National Transmission System (NTS). According to EU Directives, the NTS needs to be connected regionally and it needs to correspond, from a technical perspective, to the integrated European system. We held several meetings with the National Transport Operator Transgaz, to understand what the development plans are and we factored this into our own development strategy.
For example, BRUA will take over the transport of gas quantities exploited in the Black Sea and connect the region. This represents an opportunity for us in terms of regional expansion, keeping in mind the role we can hold within the larger European context. We already have a few markets in mind, such as Serbia, Ukraine or The Republic of Moldova (where the national transport system is now operated by Transgaz). Bulgaria is another possible partner, given that they do not have significant fields neither in terms of exploitation nor storage. The opportunities are plenty, what is important now is that all stakeholders involved l carry out their investment projects in the specific sectors they operate.
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 some goals you have set for Depogaz to achieve within the next three to five years?
We see great opportunity in becoming a key regional player, and we are not neglecting the local market either. There is room for growth for us here given the current circumstances. We plan to expand our storage capacity, namely we want to reach a 4,5 Bn cubic meters of storage, and we want to grow our injection capacity up to 30 M cubic meters per day, and 42-44 M cubic meters in terms of withdrawal.
The increase in withdrawal capacity and gas storage capacity is included in a development plan 2019 to 2023, incorporated in the NTS strategy for development. Through the increase of the withdrawal capacity we work towards reducing the dependence on external sources, therefore increasing stability and security of supply in the energy sector.
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