MOL has announced that the FGSZ Natural Gas Transmission Company, as the owner and operator of the Hungarian high pressure natural gas pipeline system and Transgaz, as the operator of the Romanian transmission system, have concluded a joint development agreement for the completion of the interconnection between the two transmission systems, on the Arad-Szeged route.
FGSZ will develop the Hungarian pipeline part, while Transgaz will develop the Romanian pipeline portion. Both parties will finance their respective sections of the pipeline from their own resources.
After finalizing the development, at the beginning natural gas will be transported from Hungary to Romania through the pipeline, however at a later stage the parties may contemplate the creation of the technical conditions for the transportation of natural gas from Romania to Hungary through the pipeline.
For the purpose of commercial operation of the pipeline, FGSZ and Transgaz intend to sign an operation agreement and a capacity allocation agreement. The agreement specifies the steps which are to be taken by the two parties in order to achieve the construction and commissioning of the interconnection by the middle of 2010.
Total length of the interconnection pipeline in Romanian territory will be 61.7km, out of which 36.7km has already been built, with a nominal diameter of 700mm. The total length of the future interconnection pipeline on Hungarian territory will be 47km. The expected cost of the Hungarian investment is HUF9 billion.
The main purpose of the agreement is to improve the security of gas supply through the diversification of the transmission routes and sources of supply.