October 20 (SeeNews) - Romanian gas pipeline operator Transgaz [BSE:TGN] said on Friday it will ask its shareholders to approve a 50 million euro ($59 million) loan from the European Investment Bank (EIB) to finance the first phase of the BRUA gas link project.
Transgaz will make the loan proposition at the ordinary general meeting of shareholders on November 27, the company said in a statement filed with the Bucharest Stock Exchange, BVB.
In September, Bulgaria, Romania, Hungary and Austria signed a memorandum of understanding to proceed with implementation of BRUA. Under the memorandum, all countries have agreed on a reverse-flow gas interconnection.
Romania has issued a building permit for the BRUA project on its territory and has conducted procedures for assigning the construction works.
The BRUA project aims to diversify Europe's gas supply sources by providing the technical means to carry gas from the Caspian basin to the markets of central Europe. The project will ensure in the Bulgarian direction of a bidirectional transmission capacity of 1.5 bcm per year and the development of a transmission capacity of 1.75 bcm per year in phase I and 4.4 bcm per year in phase II in the Hungarian direction. The Bulgaria-Hungary-Romania-Austria pipeline will have a total length of 528 km.
In mid-September, Romania's government, which is Transgaz's majority shareholder, requested the company to distribute 171 million lei ($44 million/37 million euro) in special dividend for 2016. The Romanian state owns 58.5% of Transgaz, while the remainder is in free float on the BVB.
Transgaz shares traded 0.25% lower at 402 lei on the BVB as at 1516 CET on Friday.
(1 euro=4.5975 Romanian lei)
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