Mol Nyrt., the Hungarian oil firm that’s confronted criticism for sustaining sturdy reliance on Russian vitality, sees a pipeline from the Ukrainian port of Odesa as its greatest guess at diversification.
The corporate needs to achieve entry to the Odesa-Brody crude pipeline that runs from Ukraine’s Black Sea port to close the nation’s border with Poland – permitting it to get seaborne provides from a variety of international producers, mentioned Szabolcs Pal Szabo, Mol’s senior vice chairman for worth chain administration.
Flows might then be routed to Hungary by way of the southern Druzhba hyperlink, which at the moment carries Russian oil to the nation and connects to the Odesa pipeline near the Ukrainian-Polish border.
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“The Odesa pipeline would imply entry to all types of different crude as a result of sea hyperlink,” Szabo mentioned in an electronic mail to Bloomberg. “This pipeline would serve regional, EU and Ukrainian provide safety.”
Whereas Hungary was exempted from the European Union’s Russian crude oil ban in 2022 – permitting the landlocked nation to maintain receiving Russian crude by way of Druzhba – the nation is below stress to part out these provides amid an EU push to finish vitality imports from Russia by 2027.
Connecting to Ukrainian infrastructure wouldn’t be easy, since Odesa has been a frequent goal of Russian missile assaults and the pipeline – which is at the moment out of fee – would require large investments. The Black Sea round Ukraine’s shoreline has additionally been closely mined since Russia’s full-scale invasion in 2022.
It might additionally require political acrobatics from Hungarian Prime Minister Viktor Orban, a pro-Russian chief who’s known as on the EU to chop assist for Ukraine and finish its sanctions on Russia. Orban has locked in a variety of vitality offers with Moscow and is at the moment campaigning for re-election by vowing to dam Ukraine’s EU accession course of.
Mol needs the EU and different affected nations to participate in “revitalizing” the Odesa pipeline, which the corporate says would additionally present an alternative choice to Russian oil for Serbia. Hungary and Serbia are at the moment constructing a pipeline connection.
“If the EU is adamant that the area hand over a dependable provide route, then it has a task to play within the institution of a real various,” mentioned Szabo.
Mol is at the moment upgrading its services to have the ability to refine non-Russian crude, which it estimates will price about $500 million.
For the time being the corporate depends on crude shipments by way of the Adriatic Sea as its solely various to Russian oil. However it has accused Croatian pipeline operator Janaf of overcharging for its use.
Mol’s Szabo additionally questioned Janaf’s means to hold sufficient volumes for Hungary and the broader area as soon as Russian crude imports are stopped, citing current capability assessments on the pipeline.
A Janaf spokesperson mentioned the agency has ample capability and acts in accordance with EU laws on clear and non-discriminatory pricing.
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