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Hungary's oil and gas company MOL Nyrt. said Wednesday it will get a euro200 million loan from the European Bank of Reconstruction and Development to complete a natural gas storage facility and increase energy security in the region.
The eight-year loan will be used to convert the Szoreg 1 reservoir into an underground storage facility by Jan. 1, 2010, the EBRD and MOL said.
The facility in southern Hungary will have a total capacity of 1.9 billion cubic meters, including both strategic and commercial stocks.
"Situated in close proximity to Croatia, Serbia, Romania and Bosnia and Herzegovina, the gas storage facility will also play an important role in mitigating risks of gas shortages in the wider central European region," the EBRD said in a statement.
In January, several countries in Eastern Europe and the Balkans were heavily affected by Russia's decision to halt gas shipments to Europe after a dispute with Ukraine over gas prices.
Hungary was able to ride out the crisis thanks to its ample gas reserves and even supplied gas to neighboring countries like Serbia, more deeply affected by the shortage.
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