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May 15, 2021
COMPANIES ECONOMY ENERGY

ELCEN asks Romgaz for reprieve until September 30

The representatives of ELCEN, the company managing combined heat and power district heating in Bucharest, have asked Romgaz to continue supplying it with natural gas, with ELCEN set to pay a part of the arrears on September 30, Agerpres informs, quoting ELCEN sources.

“ELCEN has asked Romgaz for a reprieve until September 30 when it expects to obtain a sum of money from Transelectrica, as bonuses for high-efficiency cogeneration. The sum is not large, but it would cover the natural gas needs for a week or two,” the sources said.

On Tuesday morning, the Energy Ministry hosted an urgent meeting between the representatives of the ministry, ELCEN, RADET and Romgaz. The meeting focused on the issue of heat and warm water supply in Bucharest.

The meeting came after Romgaz announced on Monday evening, in a press release, that it will stop supplying ELCEN with natural gas because of arrears.

Sources told Agerpres that ELCEN will in its turn be forced to stop supplying heating and warm water in Bucharest starting on Tuesday if Romgaz stops supplying it with natural gas.

“We [ELCEN] have no way of paying Romgaz’s natural gas, we no longer have the money. If Romgaz shuts down the supply of natural gas we will no longer be able to produce heating and warm water,” the sources said.

According to the communique released by Romgaz, in case ELCEN goes insolvent Romgaz will register with the body of creditors, being one of the company’s biggest creditors. ELCEN currently owes Romgaz 319 million Lei.

“SNGN Romgaz SA is keeping a close watch on the developments concerning the insolvency requests filed by Bucharest-based companies RADET and ELCEN. In case ELCEN becomes insolvent, Romgaz will register with the body of creditors, being one of the company’s largest creditors. Starting on September 27, SNGN Romgaz SA is forced to stop supplying natural gas to ELCEN,” reads a Romgaz communique remitted to Agerpres.

In July 2016, Romgaz signed two contracts with ELCEN, totalling 935.5 million Lei and set to expire on 30 September 2017. Likewise, in August the two companies agreed to roll over ELCEN’s arrears over a period of 36 months. ELCEN’s current debt stands at 319 million Lei.

“ELCEN informed us that they can no longer honour their contractual obligations starting on September 27. The contract terms currently in force and the past experience, which led to a debt of hundreds of millions of Lei, force Romgaz to stop supplying it with natural gas starting on that date and until the moment solutions and measures that will allow ELCEN to act in conformity with the signed contracts are identified,” the communique reads.

Romgaz claims that, as a company of national interest listed on the stock exchange, it has the duty to protect to an equal extent the interests of all clients and shareholders, in full observance of the law and of contractual commitments.

“ELCEN Bucharest’s recent decision to file for insolvency without first informing its partners and without going through the formalities stipulated by the contracts signed forces Romgaz to act within the limits of the mandate conferred by its Board and shareholders, namely to act in the interest of the company and of its shareholders, and to respect, to an equal extent, all consumers it directly or indirectly supplies with natural gas. The critical situation created, without consulting the parties involved, requires urgent decisions that have to be taken by all parties concerned and, unfortunately, these decisions do not belong to Romgaz alone,” the company states.

Romgaz points out that, bearing in mind the new situation, it supports any initiative coming from the parties concerned that would lead to the identification of sustainable solutions that would assure a continued supply of natural gas during the winter of 2016-2017.

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