The Gas and Power segment consists of the Supply and Trading Division and the Power and Heat Generation.
The Supply and Trading Division has been set up via the alteration of the former Gas and Power division in 2009. The activities of the new Supply and Trading Division enable MOL to take full advantage of the synergies between the supply and trading of crude oil, gas, power, CO2 and other commodities – within the Group as well as towards external market participants.
MOL is again an active participant in the gas storage business via MMBF Ltd., which generates reliable cash-flow on long term and strengthens the security of supply in Hungary.
Due to long-term growth in gas consumption in the EU countries and the high level of import dependency, we continued to focus on the diversification of gas source and the development of infrastructure (underground gas storage and pipelines) as well as utilising MOL Group’s existing primary and secondary resources.
MOL, together with its strategic partner – CEZ, the Czech Energy Company – is continuing with major investments in the Danube and Bratislava refineries including two combined cycle gas turbines (CCGT) and the revamp of the existing thermal power plant (TPP), in order to create an attractive power portfolio.

Gas infrastructure

Both the ongoing and successfully completed infrastructure developments aim to strengthen the market efficiency and the security of supply in the region and provide stable cash flow with healthy returns for the Group.

MMBF Ltd.

MOL is again an active participant in the gas storage business via MMBF Ltd., generating stable, euro denominated cash-flow on long term and strengthening the security of supply in Hungary.
With the primer goal to ensure the security of gas supply, MMBF Gas Storage Ltd. – 72.5% subsidiary of MOL – developed the underground gas storage facility with strategic mobile capacity of 1.2 bcm and commercial mobile capacity of 0.7 bcm. The strategic storage facility, in line with legal provisions, has a daily withdrawal peak capacity of 20 mcm over a period of 45 days and an additional 5 mcm/day peak for the commercial part. The gas storage facility functions through the active reservoir of Szőreg-1.
The turn-key contractor and operator of the development was MOL. The development has been accomplished according to schedule: the construction of the strategic capacities has been finalized and the 1.2 bcm strategic mobile gas stock has been injected by the end of 2009, according to Act XXVI/ 2006 on strategic stockpiling of natural gas. Consequently the 30-year contract for strategic gas storage came into effect. Commercial capacities have also been fully booked for 10 years starting from 1 April 2010. Both activities provide stable, euro denominated return for MOL Group.
MOL signed an 8-year, EUR 200 million loan agreement with EBRD (European Bank for Reconstruction and Development) in June 2009 to finance the completion of the strategic and commercial gas storage facility.

Nabucco project

MOL is taking part in the Nabucco project as 16.66% owner, in cooperation with Botas, Bulgarian Energy Holding, OMV, RWE and Transgaz. The aim of the project is to eventually transport 31 bcm natural gas per annum from the Caspian and Middle-Eastern region to Europe on a 3,300 km long pipeline.
The project gained a considerable new momentum when on 13 July the Intergovernmental Agreement (IGA) was signed by the governments of the Nabucco transit countries of Austria, Hungary, Romania, Bulgaria and Turkey. Hungary started the ratification process of the agreement in October 2009, which was eventually completed by Turkey in March 2010. Application for EUR 200 million funding dedicated for Nabucco International from the European Economic Recovery Plan was filed and was awarded in March 2010 by the Comission. In 2009 the local engineering companies started the front end engineering design work in all countries.
The commencement of pipeline operations is expected to be 2014. Nabucco will lead to more efficient and secure regional gas market and additional value generation for MOL Group taking into consideration the Pearl project in Iraq as a potential upstream source.

MOL-Gazprom cooperation

MOL and Gazprom Export have jointly elaborated a project structure to establish an underground gas storage facility in Hungary, via a 50-50% joint venture. The parties have established Pusztaföldvár Gas Storage Ltd. in December 2009.

Trading and supply operations

Managing the trading and supply operations integrated for the whole MOL Group has the apparent rationale of synergies and economies of scale. The potential improved considerably with the inclusion of the integrated planning and feedstock supply into the division – in close co-operation with the Supply Chain Management. The supply and trading activities cover various needs of MOL, Slovnaft, INA and IES, while being able to utilise the existing expertise and exploit the opportunities on the external market as well.

Crude Oil and Raw Materials Supply and Trading (Moltrade-Mineralimpex)

On the basis of Supply Chain Management needs 12.1 Mt of Russian Export Blend Crude Oil for MOL, Slovnaft and INA Sisak refineries were supplied via Druzhba pipeline in 2009. 242 kt crude oil for Brod refinery (Bosnia) was transited. Seaborne crude supply for IES / Mantova refinery reached 2.3 Mt. Furthermore 1.2 Mt of raw materials and oil products (including 657 kt 0.2 Gasoil by pipeline and 296 kt Virgin Naphtha for TVK) were imported. 
One of the main tasks of 2009 was INA crude procurement integration into the group purchasing activity in a yearly amount of around 4 Mt. 

Establishing the Commodity Trading Platform

Within the Supply and Trading Division, the Commodity Trading Platform was established with the responsibility of serving MOL Group entities in their needs of electricity (in Hungary amounting for 1.5 TWh annually), CO₂ emission allowance – including CO₂ emission-optimisation as well as trading possibilities - and commodity derivative products.
In 2009, the appropriate control framework of the commodity trading activity was created. A separate 100% MOL-subsidiary (MOL Commodity Trading Ltd) with electricity trading license was established and an own balancing circle was formed. Eligible external and MOL Group trading frame contracts enabled Trading Platform to start its operation from 1 January 2010 with strict control rules.
Trading Platform has supported the business units in their inventory and sea-borne cargo hedges along with structure risk mitigation derivative deals in connection with physical fixed price sales on oil products and in association with physical gas indexation transactions during 2009. 

Energy Portfolio Development

In order to decrease energy demand of MOL Group in a sustainable way, Supply and Trading Division is venturing on promising possibilities to utilize MOL own primary and secondary resources and decrease Group consumption by efficient, new technologies.
MOL Group owns significant gas reserves with high inert content (lower calorific value) not or not fully put into production. These reserves are now being tapped. A pilot project has embarked with a capacity of 0.8 MWe with the aim of assessing the technical and financial options to produce electricity with small gas engines/turbines directly installed on the inert gas fields.
CEGE, the geothermal joint venture of MOL, is working on the development of geothermal projects in the region, with the aim of supplying electricity and thermal heat with the transformation of the energy content of the renewable and pure geothermal power.
Beyond utilising own resources energy efficiency team was set up in July 2009 in order to optimize energy consumption on Group level. The team has launched its activity with the preparation of the energy audit of the whole MOL Group. During the audit several heat points were also revealed, where waste heat recovery systems could provide energy saving potentials. Supply and Trading Division is developing a pilot project for waste heat recovery using the Organic Rankine Cycle (ORC) technology to prove the feasibility of this potential.

Power and Heat Generation

MOL, together with its strategic partner – CEZ, the Czech Energy Company - is considering to implement three major investments – as the first remarkable projects of this joint venture – in the Duna and Bratislava refineries: two combined cycle gas turbine (CCGT) technologies each with an installed capacity of 830 MW which would result in a 58% net electrical efficiency (compared to an average 36% efficiency of gas power plants in Hungary in 2007) and thirdly, the revamp of the existing thermal power plant (TPP) in the  Bratislava refinery. The amount of energy produced will be able to create sufficient steam and energy sources for the Duna and Bratislava refineries. It also enables MOL to enter and gain a significant share of the very attractive energy market.
The preparatory works for the two 830 MW CCGT power plants’ developments are proceeding according to the agreed schedule. The revamp of the TPP in Bratislava is in process, the complete Flue Gas Desulfurisation unit work will be implemented by the end of 2011. The capacity increase of the power plant will satisfy the full electricity need of the refinery and also provide more heat.