INA, MOL SIGN MEMORANDUM ON GAS TRANSPORT

ZAGREB, Dec 17 (Hina) - The Croatian oil company INA and Hungary's leading oil producer MOL on Friday signed a memorandum on understanding regarding transport of gas via Hungary. The two companies should complete talks on the conditions of their contract by March 31, 2000. The project includes transport of 1.2 billion cubic metres of gas for Ina via Russia and Ukraine, starting on January 1, 2003. The memorandum was signed by Ina's general director Davor Stern and the president of the MOL management board, Janos Csak. Stern described the document as a step forward in creating a new power product future in Croatia. Croatia imports the Russian gas via Slovakia, Austria and Slovenia. Transit costs account for some 50 per cent of the gas price. By constructing some 35 km of a gas pipeline and connecting with Hungary, Croatia will acquire another gas supply direction, but a shorter and cheaper one, Stern said. According to rough estimates, the new gas pipeline will reduce the current transit price by some 50 per cent. According to MOL's Csak, today's event is an important part of cooperation between the companies, as well as of their initiative aimed at taking good positions in the region, which shows that both companies aspire toward providing high quality products at a lower price. The pipeline, which would connect with the Hungarian section near Donji Miholjac, would be about 15 km long. On the Hungarian side, some additional works on the existing pipeline are required. The whole investment on the Hungarian side will cost some US$50 million. MOL, Csak said, has access to the world market where it can obtain the necessary funds. Stern informed reporters that the privatisation of Croatia's largest oil company, which is owned by the state, would wait for the elections to be completed. He welcomed yesterday's announcement by Premier Zlatko Matesa regarding the deregulation of the prices of oil products and a new approach to creating market prices. (hina) rml