DistrigazSud

completed

_x000C_Distrigaz Sud (DGS) is the dominant gas distribution and supply company in southern Romania. In 2004, the Government of Romania (GOR) signed a privatization agreement for the sale of a 51 percent interest in DGS to Gaz de France (GdF), the leading supplier and distributor of natural gas in France and one of the largest gas utilities in Europe. The privatization closing is expected to occur soon. IFC's investment in Distrigaz Sud will support the company's 2005-2012 investment program aimed at upgrading and expanding the company's distribution network. DGS operates through its head office in Bucharest and 11 regional branches. In 2002, operations such as repairs and maintenance of motor vehicles and network construction activities were consolidated into a separate services branch. DGS’ gas distribution and supply activities cover 20 counties serving an area of 100,000 sq. km with a total population of 11 million. As of the end of 2004, the company had nearly 1,000,000 customers, of which about 97% are residential and comprise about 30% of gas sales. Customer growth is expected to occur through network expansions and an ongoing process of separating apartment blocks into individual accounts. High consumption industrial customers account for about 40 percent of gas sold. The company operates a distribution network consisting of over 13,000 km of main and service pipelines, and annually transports nearly 7 billion cubic meters (bcm) of gas through its distribution network. While the majority of these pipelines are made of steel, the Company has upgraded about 15% of its network to modern polyethylene pipelines. Replacement of older steel pipelines is a key component of the investment program. As a distributor, DGS does not operate high pressure gas pipelines, gas compressor stations, or gas cleaning plants. DGS obtains its gas from regional gas transmission companies at over 200 metering points (city gates) on its system. All gas is received already odorized for safety and cleaned.