Page 9 - Euroil Week 31 2019

EurOil POLICY EurOil
Hungary sells strategic gas reserve to quasi-private firm
HUNGARY
The company
stores half of the country’s annual gas consumption.
STATE development bank MFB sold its 51% stake in MMBF Foldgaztarolo, the company that operates Hungary’s strategic gas reserves, to its minority owner, the Hungarian Association for the Stockpiling of Hydrocarbons (MSZKSZ), for HUF20bn (€6.1mn), opposition daily Nepszava reported on August 1, citing data from the com- petition o ce GVH.
e MSZKSZ is a non-budgetary body, which includes Hungarian gas and oil traders. It oper- ates from fees paid by members, which include state and private companies, including Hungar- ian oil company MOL. It is overseen by the state secretary for energy at the Innovation and Tech- nology Ministry.
e state purchased the majority stakes in MMBF in 2013 from oil company MOL a er Parliament adopted legislation a year earlier that allowed only state-owned companies to operate strategic gas reserves.
In 2012, the Orban government purchased the gas storage units from German utility com- pany E.ON through Hungarian state electricity company MVM. Its subsidiary, Magyar Foldgaz- tarolo (MFGT), stores natural gas in Hungary amounting to 4.4bn cubic metres, which is half of the country’s annual consumption.
MFB had to sell its stakes due to the con ict of interest set by EU rules before 2020, State Sec- retary for Energy Affairs Peter Kaderjak said during a committee hearing last year. Parliament eased the regulations last year to allow compa- nies other than the state to operate gas reserves.
e government wanted to exclude private
companies; hence MSZKSZ, with a 49% stake, seemed the obvious choice, local media noted.
Legislation approved last year, however, opens the door for other companies to take ownership of the strategic company. Local media reports suggested that Gazrpom would be inter- ested in gaining a stake in MMBF.
Local media also unveiled other details about the transaction that could raise the possibility of a con ict of interest. MSZKSZ is headed by Bela Bartfai, the husband of Andrea Bartfai-Mager, who was in charge of the deal as Minister with- out Portfolio in charge of overseeing state assets.
e sale of the strategic reserves, and with them the gas reservoir in Algyo, southern Hun- gary with a storage capacity of 1.9bncm, also means that the state is giving up promising div- idend proceeds.
e MMBF has generated HUF64bn in pro t over the last ve years, roughly HUF13bn per year.
e government raised the minimum level of strategic reserves to 1.2bncm from 920bncm in the third quarter of 2017, citing uncertainties surrounding the future of the long-term gas sup- ply agreement between Ukraine and Russia.
Business website Portfolio recalled that Eurostat in April called on the government to reclassify MSZKSZ inside the general govern- ment, similarly to that of foundations run by the National Bank (MNB).
The reclassification would raise state debt relative to GDP by 0.3-0.4% annually between 2015-2018. ™
Week 31 08•August•2019 w w w . N E W S B A S E . c o m P9