FGSZ Ltd is currently the only company in Hungary that holdsa natural gas transmission system operator’s license. Aside from domestic natural gas transmission activity, FGSZ also performs transit activities for Serbia, Bosnia-Herzegovina, as well as cross border deliveries towards Romania and Croatia and the Ukraine.
In Hungary, FGSZ Földgázszállító Zrt. (FGSZ Natural Gas Transmission Private Company Limited by Shares, in short form FGSZ Ltd, and referred to as FGSZ) is currently the only company to hold a transmission system operator license. Its activity is carried out under market conditions regulated by law. Aside from domestic natural gas transmission, FGSZ also performs transit activities for Serbia, Bosnia-Herzegovina, as well as cross border deliveries towards Romania, and Croatia and Ukraine. In international comparison, the Company’s pipeline network represents the highest technology standards. FGSZ ranks among the region’s companies of strategic importance. Its dynamism and efficiency make the Company one of Europe’s most significant transmission system operators.
The pipeline developments of strategic importance carried out by FGSZ in recent years safeguard the Company’s future, establish its role as a regional distributor, as well as ensuring Hungary has a safe, environment friendly and competitively priced gas supply. We are prepared to face the challenges, tasks and requirements deriving from the establishment of a market which is liquid, integrated and diversified in terms of its resources, and which is also supported by the European Union. Our strategic goals necessitate further efficient and wellplanned infrastructure developments.
Highlights
- 5,784 km pipeline system
- 19 domestic, 4 import entry points, nearly 400 exit points
- 6 regional centers, 6 compressor stations
- World-class systems operation centre in Siófok, Hungary
FGSZ’s Regional Booking Platform (RBP), an IT capacity allocation application developed under a European Union project, which is a Hungarian- Romanian pilot in accordance with Commission Regulation (EU) No 984/2013 establishing a Network Code on Capacity Allocation Mechanisms in Gas Transmission Systems and supplementing Regulation (EC ) No. 715/2009 of the European Parliament and of the Council , was launched at the end of 2014. This application is suitable for running CAM NC compliant capacity auctions not only at the cross-border or domestic points found in FGSZ’s system, but also at any other network point, even those independent of the cooperating national natural gas transmission system.
COMPETITIVE ADVANTAGES
- Geographic location: FGSZ also plays a key role in terms of regional transit transmission.
- Quality assurance: In 1997, audited and certified quality management systems were put in place at FGSZ. Since 2014, these have been operating as an integrated system with the following components: Quality Management System (QMS ), Technical Safety Management System (TSMS ), Information Security Management System (ISMS), Calibration Laboratory Management System (CLMS ) and Welding Management System (WMS ). In 2014, FGSZ successfully completed two integrated inspections carried out by SGS Hungária Kft. in accordance with the ISO 9001:2008 and the ISO / IEC 27001:2005 standards.
The accreditation process for the calibration laboratory’s activity is underway in accordance with the provisions of MS Z EN ISO /IEC 17025:2005. In 2014, the National Accreditation Board reviewed and accepted documentation submitted in June 2013. The accreditation will likely be acquired in 2015.
In 2014, FGSZ began to create and implement the Energy Management System (EMS ) in accordance with the ISO 50001 standard, which is expected to be completed by 5 December 2015. - Stable cash flow: The operation of FGSZ’s highpressure natural gas transmission grid of approximately 5,800 km – covering the entire territory of Hungary – and the non-discriminatory sale of its capacities and supplementary services provide stable cash-flow for the MOL-Group.
KEY ACHIEVEMENTS
Quintuple Best Employer
FGSZ has participated on Best Employer Survey of Aon Hewitt since 2009. FGSZ has been Best Employer in Hungary fives times and Best Employer in Central Eastern Europe on three occasions.
OUTLOOK
European dimensions
FGSZ is interested in creating a more efficient gas market resting, on several pillars. Therefore, in the 10-year period between 2015 and 2024, it wishes to participate in comprehensive infrastructure developments at both Hungarian and international level to promote the creation of the domestic liquid gas market. The transformation of the gas market is allowing domestic consumers to access gas sources competing against each other in the region, and thus to optimise their portfolios in line with their possibilities.
As the first step in our strategic investments between 2006 and 2010, we significantly increased Eastern import capacity in line with the development of our strategic storage facility. We also constructed the Hungarian-Croatian and Hungarian-Romanian interconnectors.
The second stage of strategic investments planned for the 2011-2020 period includes development in the north-west and north-east. FGSZ is planning to expand existing import capacities from the West, along with internal improvements to guarantee security of supply for the Trans-Danubia region independently of the HAG pipeline.
In 2012, the Company concluded a cooperation agreement with UKRTR ANS GAZ for natural gas transmission from Hungary to Ukraine, as the result of which it has provided the option of natural gas transmission to Ukraine on an interruptible basis since the spring of 2013.
FGSZ has set the goal of guaranteeing the possibility to import natural gas from every direction in the interest of security of supply, and of becoming an integral part of the region that surrounds it by making its existing cross-border connections bi-directional. Developing the option for gas supply from Romania was an important step in this regard. Although capacity opened in the first stage only allows for the delivery of a smaller amount, FGSZ and its Romanian partner are working together to expand this significantly. Hungary’s gas supply will be set on a more secure footing by the connection of southern and south-eastern, then eastern, and finally northern and western gas sources.
The long-term strategic investments of FGSZ make it possible for Hungary to leave its current peripheral role in gas transmission and to develop into a regional gas distribution center in the next decade.
REGULATED TRANSMISSION TARIFF CHANGES
The transmission tariffs essentially remained the same both in content and in size in 2014. However, there have been some changes in the rules that govern the application in the spirit of the preparation for the EU-level harmonisation of applicable system usage regulations (CAM NC), which will enter into force in 2015, and the tariff system. In this context, the authority responsible for setting prices, the Hungarian Energy and Public Utility Regulatory Authority, rearranged entry and exit fees, which did not increase the total earnings of FGSZ but can facilitate more effective cost management for the systems users. In addition, a new product (quarterly capacity) and a new pricing for short-term capacity booking were also introduced into the regulation. As an additional regulatory change in 2014, a new rule (interruptible pricing) was set in order to encourage system users to increase stored quantities, which will have a significant financial impact on FGSZ mainly in 2015.
The official cost review that began in 2013 was not finished in 2014, so the regulatory cycle that began on 1 January 2010 is still in effect.