Magyar will not allow the construction of a fuel storage facility for Ukraine in Hungary
Prime Minister of Hungary Peter Magyar stated that under the government of the Tisza Party, no storage facility for Ukrainian strategic petroleum product reserves will be built in the country. This concerns a project that Ukraine's Naftogaz and Hungary's MOL began to work on after signing a memorandum of cooperation.
Magyar made the statement on September 21 during a session of the Hungarian parliament. According to him, MOL's negotiations with the Ukrainian side began under the previous government of Viktor Orban, and the current cabinet does not consider it acceptable that the company discussed the project without coordination with the authorities.
"As long as the Tisza government exists, there will be no Ukrainian oil storage facility in Hungary," — said Magyar.
The prime minister also said that he discussed the situation with MOL CEO Zsolt Hernadi. According to Magyar, he pointed out to the head of the company that the state is a major shareholder in MOL and that the government expects appropriate treatment in discussions of such projects.
MOL itself emphasizes that the project is at the earliest stage and a decision on construction has not yet been made. The company explained that the memorandum with Naftogaz provides for the study of technical and financial conditions, as well as requirements in the fields of ecology, safety, and state regulation.
According to MOL, preparation of a potential project could take several years. The company said that there has been no need so far to involve the Hungarian government in the discussion because the parties are only assessing the feasibility of implementing the project. If the work moves to a substantive stage, MOL intends to conduct necessary consultations with the Hungarian authorities.
Naftogaz and MOL signed the memorandum during the first summit of the Carpathian Initiative. The document provides for joint work on the construction of facilities for storing petroleum products in Hungary near the Ukrainian border. These facilities are intended to be used to supply the Ukrainian market.
At Naftogaz, the project was explained by the need to reduce risks to fuel supplies due to Russian strikes on Ukrainian infrastructure. The company expects to place additional reserves outside the attack zone and at the same time expand routes for supplying petroleum products to Ukraine.
MOL, for its part, notes that storing strategic reserves of other countries is common practice in the European energy market. The company already stores part of the strategic reserves belonging to EU as well as non-EU countries in Hungary.
Thus, the signed memorandum does not yet mean the start of construction: the parties are only studying the possibility of creating the storage facility, while the Hungarian government has publicly opposed the implementation of the project.
