Hungary and Slovakia held talks at the weekend on plans to build a gas pipeline between the two countries, political daily Magyar Hirlap reports, citing state secretary at the Economy Ministry, who met with his counterpart in Bratislava. The project, which is enjoys the backing of both governments, would include construction of an 85 kilometer pipe in Hungary and a feed-in pipe in Slovakia 15 kilometers off the Hungarian border. The pipe is expected to be built by MOL who is already in talks about the details of the investment, the paper said.
Our view: The size of the investment could be some US$ 100-150m, the most, we believe. While understanding the rationality behind, namely to increase import capacities of Hungary due to rising gas consumption, we do not consider MOL’s move towards a lower return utility business as a perfect step from strategic point of view. We do not believe however, that the news would have material impact on MOL’s share price today.