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MOL and CEZ establish joint-venture

Hungarian oil and natural gas company MOL has established a joint-venture company with Czech power company CEZ pursuant to an agreement concluded between the two companies earlier.

MOL and CEZ will each have 50% equity interest, equal voting rights and an equal proportion of operational decision-making in the joint-venture company.

The joint company will focus will on gas-fired power generation and related gas infrastructure in Slovakia, Hungary, Croatia and Slovenia, MOL said.

The joint venture's first major planned investment is the construction of 800-800 MW-capacity CCGTs at MOL refineries in Bratislava, Slovakia and Százhalombatta, Hungary. In addition, the joint venture will modernize and expand the capacity of the current thermal plant in Bratislava to 160 MW. The expected cost of both projects will be approximately €1.4 billion.

According to earlier announcements, the JV is expected to build power plants with a combined capacity of 1,760MW by 2013.

MOL set up a strategic alliance with CEZ in December 2007. As part of the alliance CEZ bought a 7% stake in MOL at Ft 30,000 per share late January, though MOL has an option to repurchase the shares at a price of Ft 20,000 apiece at any time within three years. (MTI – Econews)