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Croatian JANAF and MOL negotiate an oil transport agreement

The Croatian pipeline operator JANAF will meet with the Hungarian oil company MOL on Wednesday in order to discuss ways of extending their collaboration beyond their current oil transportation agreement, which expires on December 31.

JANAF delivers 2.1 million tons of crude oil per year to MOL refineries in Hungary, Slovakia and Romania. Croatian oil company offers to increase its delivery volume as Hungary is under pressure to reduce its dependence on Russian oil via the Druzhba Pipeline. Hungary and Slovakia, two EU member states that want to continue receiving Russian oil despite EU efforts at diversification of supply, are both keen to maintain this source. The Adriatic Pipeline would be the main alternative route for oil shipping. MOL has denied JANAF’s capacity to supply enough oil to its refineries, a claim JANAF rejects. JANAF is ready, both technically and organizationally, to supply all the crude oil needs of MOL's Central European refineries. The company also advocates increasing the amount of oil transported and expanding the collaboration with MOL.

JANAF said, "We emphasize the importance of our pipeline because it is the only reliable route that guarantees the continuity and delivery of products."

Hungarian officials accuse JANAF imposing high transportation fees. They claim that they are exploiting the situation resulting from the conflict in Ukraine. JANAF denied these claims and stated that it charges MOL standard rate.

A spokesperson for MOL responded to a question about the scheduled talks with JANAF on Wednesday: "As usual, MOL is prepared for negotiations."

JANAF also faces risks in its agreement with Serbian-owned Russian oil company NIS, which is valid until December 31 2026. The deal may be in jeopardy if U.S. Treasury’s Office of Foreign Assets Control imposes new sanctions against NIS beyond its current deadline of Oct. 8.

OFAC sanctioned Russia’s oil sector, as well as the NIS. However, enforcement was repeatedly delayed.

JANAF said its transport licence for NIS is valid until 8 October and it will ask to extend the licence.

(source: Reuters)