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Gazprom, E.ON to ease Hungary's gas shortage fears

E.ON is planning to spend €300 million boosting the capacity of its existing gas storage facilities in Hungary by 50% by 2009.

OAO Gazprom, the world's biggest natural gas producer, obtaining stakes in Hungarian gas assets will alleviate fears of a shortage of the fuel in the country, Economy Minister János Kóka said. Gazprom will acquire the stakes of E.ON Ruhrgas in Hungarian natural gas storage and trading companies from E.ON AG, the world's largest utility, in return for a quarter of a Siberian gas field. E.ON getting access to more production may also help the security of supply in Hungary, Kóka said. “E.ON is not planning to withdraw from Hungary,” Kóka said yesterday after meeting with Klaus Hammer, chief executive officer of E.ON Földgáz Storage Zrt, E.ON's local gas storage unit.

Gazprom's expansion into Hungary was expected to counter efforts by Hungary to diversify its natural gas supplies after Russian deliveries of the fuel were cut 20%-25% earlier this year due to a cold snap. Hungary is planning to add gas storage capacities and examine new import routes to avoid future shortages of the fuel. E.ON is planning to spend €300 million boosting the capacity of its existing gas storage facilities in Hungary by 50%, or 1.7 billion cubic meters, by 2009, Hammer said at the press conference. The company would also bid to construct Hungary's planned 1.2 billion cubic meter gas storage, Hammer said. (The tender for the gas storage is already available.) Hungary would also discuss the effects of the planned asset swap between E.ON and Gazprom with the Russian company's executives at a meeting in Moscow in October, Kóka said. (Bloomberg, Gazdasági Rádió)