MOL GROUP Annual Report

Trading and supply operationsManaging the trading and supply operations integratedfor the whole MOL Group has the apparent rationale ofsynergies and economies of scale. The potential improvedconsiderably with the inclusion of the integrated planningand feedstock supply into the division – in close co-operationwith the Supply Chain Management. The supply and tradingactivities cover various needs of e.g. MOL, Slovnaft, INAand IES, while being able to utilise the existing expertise andexploit 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, 11.8 Mtons of crude oil for MOL, Slovnaft and INA Sisak refinerieswere supplied via Druzhba pipeline in 2010. 550 kt crude oilwas transited for Brod refinery (Bosnia). Seaborne crudesupply for IES / Mantova refinery reached 2.4 M tons.INA crude oil procurement integration into the Grouppurchasing activity taken place during 2010 involvingMOLTRADE-Mineralimpex for pipeline and seabornedeliveries. 3.5 million tons of crude oil has been procuredfor INA refineries (i.e. Rijeka and Sisak) In order to ensurecrude supply security of INA a 2-year seaborne crude supplycontract was concluded on purchasing 1.4 million tons ofcrude oilIn addition to the crude oil supplies, 1.5 M tons of rawmaterials and oil products (including 1 M tons 0.1 Gasoil bypipeline and 220 kt Virgin Naphtha for TVK) were imported.Energy Portfolio DevelopmentThe Energy Portfolio Development continues to exploit theexisting, but so far untapped resources and competenciesof the company, primarily in the field of geothermal energyand inert gas utilization, thus enable MOL Group to enterthe small scale power plant segment, as a new industry.The planning and permitting phase of the inert gas pilotproject, using natural gas with lower calorific value, with0.8 MW electric capacity was finished in 2010. It will befollowed by the project implementation and commissioningin 2011. In addition, there are a number of similar inertgas projects with much larger scale under preparation indifferent areas of Hungary. The total portfolio will enableMOL to establish sizeable market presence in the smallscale power plant sector supported by its gas engines/turbines installed near the inert gas fields.In the year 2010 several geothermal projects have beenidentified to be feasible both from geological and financialpoint of view, targeting significant electric and heatcapacity. The first steps of MOL’s geothermal strategyis being implemented through CEGE, the dedicatedgeothermal joint venture, and now MOL looks forward tothe launch of the geothermal concession tenders in 2011.As the first step of the Group level energy audit of MOLGroup, the Energy Efficiency team has completed thecomprehensive energy efficiency assessment of TVK,which is followed by the energy audit of MOL’s maindomestic Upstream and Downstream sites.Power and Heat GenerationMOL, together with its strategic partner – CEZ, the CzechEnergy Company - is considering to carry out three majorinvestments. The ongoing project is the revamp of theexisting thermal power plant (TPP) in the Bratislava refinery.Beside this the partners are examining the opportunities ofbuilding two combined cycle gas turbine (CCGT) technologiespower plant in the Danube and Bratislava refineries. EachCCGT has a planned capacity of 830 MW which would resultin a 58% net electrical efficiency.The revamp of the TPP in Bratislava is in process, thecomplete Flue Gas Desulfurization unit work will becompleted by the end of 2011. The capacity increase of thepower plant will satisfy the full electricity and steam need ofthe refinery. The preparatory works for the developments ofthe two CCGT power plants are proceeding according to theagreed schedule. The Hungarian project has been granted anIPPC and a Building Permit, in Slovakia a valid EIA resolutionhas been received by the end of 2010.Gas and PowerCommodity Trading PlatformMOL Commodity Trading (MCT) is a 100% MOL ownedcompany. The company is responsible for managing oiland oil products derivative transactions, optimization andtrading of CO2 emissions and electricity.In 2010 MCT efficiently performed derivatives structuringfor oil and oil products with total turnover of 4 milliontons in close co-operation with other business units. Thethree main areas of commodity hedging transactionswere relating to crude supply, hydrocarbon inventorymanagement and other commercial opportunities.Optimization and trading of CO2 emission allowancesfor MOL Group included compliance transactions, CER-EUA swaps – more than 7 million tons of allowances weretraded altogether MCT provided efficient energy positionmanagement for Hungarian entities amounted to around1,5 TWh of electricity.Supporting the efficient and secured oil, oil product, CO2and energy management for MOL Group, MCT successfullyimplemented an Energy Trading and Risk ManagementSystem in 2010, which is representing the state-of-the-artcontrol framework.In 2011 Trading Platform is going to extend its electricitysupply operation within MOL Group.Underground Gas storage Szőreg in Hungary44 MOL Group annual report 2010 45