Hungary State Power Firm To Build Gas Link With Slovakia

Hungarian state-owned power wholesaler MVM Zrt. will oversee construction of a natural gas interconnector with Slovakia as a next step in Hungary's drive to diversify gas supplies and reduce dependence on Russian imports.

"We are looking to take a bigger part of the natural gas market so the interconnector is a logical move for us," MVM communications director Gyorgy Felkai told Dow Jones Newswires Monday.

The move is in line with MVM's plans to become a major player of Hungary's natural gas business.

Earlier, network construction and maintenance was fully overseen by a subsidiary of Hungary's largest oil and gas company MOL Nyrt. (MOL.BU), which completed the construction of an interconnector with Romania and Croatia and had also made headway in preparing the Slovakia link.

Felkai said MVM can realize the investment with more "favorable terms", without going into details.

MOL declined to say why it wouldn't be the one to complete the project.

The Hungarian earlier this year state bought a 21.2% stake in MOL from Russia's Surgutneftegaz JSC (SGTZY).

Since then the government has repeatedly stated it wants MVM to have a bigger role in other areas of the energy market and also that it would strive to utilize the synergy in having ownership in both companies.

-By Gergo Racz, Dow Jones Newswires; [phone]; [e-mail]