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S&P affirms MOL’s ‘BBB-’ rating after the Russian supplier Gazprom halted sure people who rely on gas for heating can
Poland no longer receives gas from Russia
keep warm in the winter should Estonia fail
with stable outlook shipments in April after Poland refused to to create the capacity to receive liquified
pay for gas in roubles. Payment in roubles
natural gas (LNG) in Paldiski this year.
S&P Global Ratings affirmed Hungarian oil was a demand by the Russian side in response “Growing the gas stockpile is just one of the
and gas company MOL’s ‘BBB-’ rating with a to Western sanctions after Russia attacked ways we will be ensuring energy supply for
stable outlook on June 14. MOL shares gained Ukraine in late February. the coming winter,” Timo Tatar said.
6.6% on the news The auction for the link with Denmark Procurement conditions ruled out the
The rating agency said that political risks concerns gas to flow via the Baltic Pipe, a new participation of Russian gas, while there
MOL faces, in the form of a European Union link, the construction of which is nearing is clear deficit of gas from elsewhere and
embargo on Russian oil and a windfall tax completion. The Baltic Pipe’s capacity of about supply sources, Ando Leppiman, head of
on refiners introduced by the Hungarian 10 billion cubic metres (bcm) of gas annually the Estonian Stockpiling Agency, said. The
government, are mitigated by “robust” cash will replace supplies from Russia. Klaipeda LNG terminal remains the only
flow boosted by high commodity prices. By combining flows via the Baltic Pipe way to source non-Russian gas.
S&P noted the timeframe of extending from Norway and through links with “The problem is availability. Also, price,
the exemption of pipeline deliveries would neighbouring countries and LNG imports as it is irrational to buy gas at prices you
play “an important role” in the company’s from Qatar and the US, Poland expects no cannot really expect the consumer to cover.
ability to utilise its capacity and maintain cash disturbances after severing gas ties with Russia But we cannot describe the situation as
flow. If MOL needed to replace its Russian in the wake of the war. catastrophic either. Our task is to procure 1
crude, “significant” infrastructure and asset Gaz-System will also auction capacity for TWh of gas by year’s end or by autumn, and
investments might be necessary, it added. shipping gas through interconnectors with I remain optimistic in terms of achieving
The company earlier put the cost of Germany. that goal,” Leppiman said.
converting its refineries to $500mn-700mn. Auctions will be held on July 4 on the GSA
The windfall tax on refiners could add booking platform for the links with Denmark,
HUF250bn (€625mn) to MOL’s tax payment Lithuania, and Slovakia. Auctions to ship gas Croatia mulls increasing storage
in 2022, S&P said. In spite of those factors, via links with Germany will take place on the
S&P said MOL’s profits stemming from the RBP platform. capacity of Janaf oil pipeline
big Urals-Brent spread, its “business resilience
and diversity” and “prudent balance sheet The Croatian authorities are taking steps
management” will limit the overall effect on Estonia might not be able to to increase the storage capacity of the Janaf oil
credit metrics. S&P could lower MOL’s rating pipeline to guarantee energy security during
if an unexpected change in crude sourcing stockpile enough gas for winter the Russian war in Ukraine, N1 reported on
was to materially cut refinery output parallel June 9.
with a fall in prices. Gas company Eesti Gaas does not believe The Primorje-Gorski Kotar County
MOL shares gained 6.56% to HUF2,794 Estonia will be able to stockpile the 1 councillors amended the county’s physical
after the review. Year-to-date, the stock is up terawatt-hour of gas it needs for the coming plan, increasing the Janaf oil pipeline’s storage
15%. heating season should its LNG terminal capacity in the town of Omisalj on the
In related news, MOL said it shut down plan fall through. The first procurement northern Adriatic island of Krk. They also
production temporarily at its Hungarian yielded only a tenth of the required volume, granted the Kraljevica shipyard the status of a
refinery close to Budapest, after a fire with the Estonian Stockpiling Agency (ESA) state shipyard.
broke out at the atmospheric and vacuum forced to hold additional tenders, ERR.ee, The new storage will cover an area of
distillation unit. The fire could temporarily an Estonian news website, reported on June 640,000 square metres and will increase the
cut daily production capacity by about 8,000 10. Omisalj terminal’s capacity to 2.04mn cubic
tonnes from 21,000, it said. The Estonian Stockpiling Agency metres, while new storage for refined products
There were no injuries and no invited 27 gas sellers to the first public will total 220,000 cubic metres of capacity.
environmental damages. The unit affected procurement. Margus Kaasik, CEO of Eesti Two new tanker berths will also be built to
by the fire could return to normal operation Gaas, which also participated, said that the increase the country’s oil storage.
within less than two weeks, the oil company low number of bids means the gas market In May, Croatia said it could increase
added remains uncertain. the transportation capacity of Janaf by 30%
“The bids did not amount to 1 TWh. to supply Hungary with oil. Janaf currently
The market was not willing to pledge that transports 11.4mn tonnes of crude oil
Poland to auction capacity much gas. Sellers are uncertain and tend to annually.
sit on gas for themselves and their existing

on gas links with Denmark, customers to play it safe,” Kaasik said. Gas link between Serbia and
Kaasik said it is by no means certain
Lithuania, Slovakia in July Estonia will manage to buy the necessary
quantity at future tenders. “While they
Poland is planning to auction annual gas might see more bids, I remain sceptical Bulgaria to be ready in 2023
transmission capacity on three new gas links in terms of whether we can secure the Serbian Energy Minister Zorana Mihajlovic
with neighbouring Lithuania and Slovakia, necessary 1 TWh of gas,” Kaasik suggested. said that with the construction of a gas
as well as Denmark, on July 4, Polish gas grid Timo Tatar, undersecretary for interconnector with Bulgaria, that should
operator Gaz-System said on June 13. the Ministry of Economic Affairs and be ready next year, Serbia will get the
Auctioning capacity to ensure gas flows Communications, said that the results of the opportunity to receive gas from suppliers
between connected grids is key to diversifying first procurement were to be expected and other than Russia, the government said in the
gas supplies from “several directions and reflect the situation on the gas market. statement.
sources”, Gaz-System said. The state gas stockpile is meant to make The construction of the gas interconnector

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