THE GAS transmission unit of Hungarian oil and gas group MOL has proposed to the government the construction of another pipeline from Ukraine to meet Hungary’s growing demand for gas, the company’s CEO Janos Zsuga is reported to have told a recent meeting. Mr Zsuga said Hungary’s daily peak consumption during the winter months could rise from 96m cum to 120m cum by 2011-2012.
In order to meet the extra demand, MOL is proposing construction of another 130-km pipeline alongside the existing one from Ukraine. Although the proposal does not reduce Hungary's dependence on Russian gas, it is the best of the three options the company has considered, the CEO said. The other options include a new pipeline from Austria, or a new pipeline from Slovakia, both of which would cost more than the additional pipeline from Ukraine.
"MOL's plan to extend the capacity of the existing pipeline from Ukraine is only rational if (1) the plans to build a big LNG terminal in Rijeka, Croatia fails, and (2) Falcon Oil also fails to put its gasfield in SE Hungary operational," Peter Tordai of KBC Securities commented. He added that, at the moment, he considers MOLS's new pipeline plan to be in a very early stage, adding that no market reaction to that should be expected.
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