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Govʼt modifies resolution on sale of interconnector project firm

A government resolution published in the official gazette Magyar Közlöny modifies the terms of the sale of state-owned Magyar Gáz Tranzit (MGT), a project company for an interconnector between the gas networks of Hungary and Slovakia, to FGSZ Földgázszállító, a unit of oil and gas company MOL.

The resolution sets a HUF 38 billion price tag for MGTʼs business and HUF 7.3 bln for its shares. MGT will pay off its loans from the purchase price before the transfer of ownership takes place, state news wire MTI reported.

A resolution on the sale issued late in 2017 had put the price for the business at HUF 34 bln, and the price of the shares at HUF 12 bln. That resolution was withdrawn at the same time the new one was issued.

The new resolution stipulates that the state must pay FGSZ a HUF 1 bln indemnity if an investment expanding a compressor station in Szada, on the outskirts of Budapest, is not started within five years of the sale.

The resolution sets deadlines of June 30, 2019, for signing the contract on the sale, and December 31, 2019, for closing the agreement on the transfer of the business.

A separate resolution qualifies the acquisition of MGT by FGSZ as a matter of "national strategic significance," thus exempting the transaction from the scrutiny of competition authorities.

The interconnector started commercial operation in 2015. It has annual firm transmission capacity of 4.5 bln cubic meters from Slovakia to Hungary, and interruptible capacity of 1.8 bln cubic meters in reverse mode.

The 113-kilometer interconnector runs between Velʼké Zlievce, Slovakia, and Vecsés, on the southeastern edge of Budapest. The Hungarian section is 94 km long.