The EBRD is helping Hungary enhance its energy security by providing a €200 million loan to MOL, Hungary’s leading energy company, to finance the completion of a strategic gas storage facility in the southern part of the country.
Situated in close proximity to Croatia, Serbia, Romania and Bosnia and Herzegovina, the gas storage facility will also play an important role in mitigating risks of gas shortages in the wider central European region.
The proceeds of the eight year loan will be used to complete the conversion of the Szőreg 1 reservoir into an underground storage facility.
Upon completion, expected by 1 January 2010, the strategic gas storage will be able to ensure a continuous supply of gas for at least 45 days at a peak capacity of 20 million cubic meters per day.
In addition to providing a strategic buffer for possible energy shocks, the new storage facility will also be used for commercial purposes. This will increase Hungary’s commercial gas storage capacity by 20 percent and promote higher competition in commercial gas storage sector, currently dominated by one player.
“Improving energy security is a core task on the EBRD agenda. This project will boost Hungary’s energy independence and will make central Europe better equipped to address any future shortages of gas supply. It will also lead to further liberalisation and increased competitiveness on the Hungarian energy market”, said Riccardo Puliti, EBRD Energy Business Group Director, during a signing ceremony.
This project is one of the several gas storage financings being considered by the EBRD in order to improve the security of supply in the Bank’s region. In May, the EBRD provided €70 million for an acquisition of a gas storage facility in Croatia.
“The strategic gas storage can be filled up with gas as of 1 January 2010, while the commercial capacity is expected to be available as of 1 April 2010. This will make the Hungarian economy, as well as the region more resilient to disruptions in gas imports”, said György Mosonyi, MOL CEO.
MOL is a leading oil and gas company in Central Europe and the largest company by sales in Hungary. In the early 1990s it became the first fully privatised national oil and gas company in Central Europe.
Since the beginning of its operation in Hungary, the EBRD has invested over €1.9 billion across more than 100 projects.
The EBRD, owned by 61 countries and two intergovernmental institutions, is supporting the development of market economies and democracies in countries from central Europe to central Asia. www.ebrd.com
MOL Plc. is a leading independent, international and integrated oil and gas company in Central-Eastern Europe, headquartered in Budapest. It has operations in Europe, Middle East, Africa and the CIS member states and it employs over 17,000 people worldwide. MOL also owns three highly complex refineries in Hungary, Slovakia and Italy with a sales turnover of 18.1 mtpa and according to Wood Mackenzie global survey the refineries in Hungary and in Slovakia are the most efficient refineries in Europe. MOL operates over 1,000 filling stations in Central and South Eastern Europe. At the end of 2008 MOL had 352.3 MM boe proved and probable hydrocarbon reserves and 86.3 M boe/day hydrocarbon production. The Group also operates over 5,000 km high pressure natural gas pipeline network in Hungary and is involved in the petrochemical business as well.