Croatia's JANAF and MOL Close In on Expanded Oil Transport Deal

Croatia’s JANAF is nearing a new oil transport agreement with MOL that could sharply increase pipeline volumes, marking a potential shift in regional crude flows as Central Europe looks beyond Russian supply.

(Reuters) — Croatian pipeline operator JANAF expects to sign a new oil transport agreement with Hungarian oil group MOL in mid-January, a JANAF board member told regional N1 television on Dec. 19.

Vladislav Veselica said that MOL has requested that the contract reflects the prices of transport for larger oil volumes than previously.

An agreement would finalize months of talks complicated by MOL's accusations that JANAF had been breaking the existing contract.

Under the existing deal, which expires on December 31, JANAF transports 2.1 million metric tons of crude oil per year to MOL's refineries in Hungary and Slovakia. The Croatian company has offered to increase volumes as Hungary seeks to reduce reliance on Russian oil supplied via the Druzhba pipeline.

"For the first time, MOL requested larger volumes of crude oil; from 2 million to 11 million tons," Veselica said. "We are preparing an offer and will deliver it to MOL in the coming days."

MOL had questioned whether JANAF would be able to supply its refineries with enough oil and has repeatedly accused the company of breaking the terms of its contract.

JANAF denies that it has broken the terms of the contract and has said that MOL's use of its pipeline was significantly below expected levels.

MOL did not have a representative available for immediate comment.