Logistic brochure (pdf, 3.3 MB) - Mol

To our readers
Through this publication, we should like to acquaint you with the activities of the MOL Group Logistics
Unit, its equipment and its operations. We would also like to review the market demands the current
system was established to meet, along with important developments it has had to respond to.
The key competitive factors in the area of Logistics are focus on the customer, cost-effectiveness
and optimal execution of distribution and storage functions. One of the organisation’s top priorities is to
maintain the quality of refinery products throughout the logistics process, up to and including the
customer storage tank, or the customer vehicle fuel tank at our filling stations.
One of the decisive results of change over the last decade has been that competition in the oil industry
has now focused on the supply chains of integrated oil companies, rather than on products, salesmen,
or refineries. Fast response to market change, focus on the customer and optimal orchestration of the
crude oil supply-refining-distribution-marketing sequence, have become crucial competitive factors.
The MOL Group Logistics Unit – similar to other organisations – is characterised by the constant need
to improve. As a result of comprehensive technical upgrades during the early 90’s, our storage depots
are now fully in compliance with stringent EU environmental specifications, in every respect. In addition,
the modernisation and automation of our loading systems and tanker lorry fleet have also been carried
out. The successful functioning of our logistics processes is supported by a state-of-the-art information
system, which on one hand delivers more accurate planning and execution of such processes, and on the
other, has increased the security of our assets.
From 2001 onwards, this approach was gradually and successfully introduced along the entire MOL
Refining & Marketing Division (RMD) supply chain, together with associated execution of decision-making
and implementation tasks. The MOL Logistics Unit now operates as an integral part of that supply
chain. Its valuable contribution can be gauged principally by the healthy state of RMD profitability today.
As MOL Group operations expanded across national borders, so the Logistics Unit itself, and its
operations, also become regional in nature. The integrated Logistics Unit now supplies 871 filling stations
and about 14 thousand business customers, via a 2,530 km long pipeline network and a total 41
depots, owned or leased, in 6 countries. The amount of products moved annually totals 25 million tons.
The Logistics Unit, through reliable fulfilment of business customer contracts, the accuracy of customer
services, and its general high standards, plays a leading role in ensuring customer satisfaction with MOL
Group services. Moreover, the Logistics Unit, supported by the thorough and precise activities of its
experts, the upgrades implemented across the area, and not forgetting its very innovative mentality, has
contributed significantly to the fact that MOL Group has recently strengthened its market shares in an
environment of ever-increasing regional competition.
3
Ferenc HORVÁTH
Managing Director
Refining & Marketing
MOL Group

Crude oil logistics
in Hungary during
the pre-pipeline era
The development of crude oil transportation
means and methods is closely related
to the development of the oil industry.
Over the decades, the demand for various
types of hydrocarbon derivative changed
continually.
New products appeared the distribution of
which required new methods. The geographical
position of the country and historic, economic
and eco-political factors also played
an important role in the development of
hydrocarbon transportation systems.
The beginnings (1865 to 1918)
Crude oil transportation
in tanks by rail
The beginning of
this era saw the
general use of
kerosene, the first
product produced
by processing crude
oil. Used primarily
for illumination,
this product, of
foreign origin, was initially delivered to customers
in containers. From 1865 onwards, small
kerosene refineries were established in Hungary,
which processed crude oil from Romania, Galicia
and later of domestic origin. Most of the finished
product was distributed to consumers in barrels,
with a smaller amount by rail tanker car.
At the turn of the century, oil processing units
were established which could already be considered
large-scale plants. Crude oil arrived at
Bratislava and Budapest primarily by Danube
barge, and Fiume by sea. Galician crude oil was
delivered to refineries by rail tanker car. After the
turn of century, refineries of greater capacity
were built. In addition to kerosene – with the start
of motor-car travel - petrol and diesel appeared.
Since demand did not require improvements in
the distribution process, associated logistics did
not follow the development in the crude oil industry.
Crude oil could be economically transported
simply by water and rail tanker car, the same also
being true for finished products.
4
Between the two world wars (1918 to 1939)
Loading a barrel
with crude oil
Following the
World War I peace
treaties, the majority
of large plants and
crude oil fields were
located in territories
disannexed from
Hungary. Only two
medium-sized refineries
and four smaller
plants were left within
the new national borders.
The Csepel and
Almásfûzítô refineries, both located on the
Danube, were supplied with crude oil by barge,
and the smaller units by rail tank car. Although
feedstock was only available from foreign
sources, the number and capacity of refineries
increased continuously. Some changes were
brought about by the appearance of the first
tanker lorry in Hungary, but the proportion of
transportation by tanker lorry remained low, due
both to the out-of-date road network, and the
low number of road vehicles. The lion’s share of
transportation was by rail tanker car or container.
Transportation by tanker lorry in the pre-pipeline era

The place and role of
Logistics in MOL Group
In MOL Group, the predecessor of
today’s Logistics Unit was the Mineral
Oil Marketing Company (Ásványolajforgalmi
Plc.), established in 1948.
Called ÁFOR after 1957, the company
was a member of the National Crude Oil
& Gas Trust (Országos Kôolaj- és Gázipari
Tröszt - OKGT), for three and a half
decades.
MOL was established in October 1991.
Following organisational changes, crude oil and
product storage and distribution activities were
performed by the Product Storage & Distribution
organisation (TTSz), reporting to the Marketing
& Sales Directorate.
In 1996, after core processes had been
audited, a significant re-organisation took
place; as the result of an efficiency improvement
project, (CPR - Core Process Redesign),
an independent logistics organisation
was created. In 2001, the Logistics Unit
became an integral part of the new Refining
& Marketing Division (RMD).
Crude oil
Supply
The Logistics Unit’s place in the supply chain
Refining
& Marketing
Refining Logistics Commercial
Supply Chain Management (SCM)
5
Co-ordinated by Supply Chain
Management (SCM), the Logistics Unit carries
out its tasks in conjunction with two
other important organisations - Refining and
Marketing. On 1st January 2004, the integrated
Logistics Unit, which includes similar
functions at Slovnaft, was established.
Logistics Unit responsibilities are to manage
MOL feedstock supplies, to perform
stock management tasks, to store and distribute
self-produced or imported hydrocarbons,
and to provide logistics support to
trading and regional sales activities.
Additionally, the Logistics Unit carries out
the organisation and management of effective
and quality-focused customer services
in compliance with sales contract commitments,
as well as the general operation of
logistics systems in a cost and capacity-efficient
manner.
DS
Technology

At the time the Logistics Unit was established,
more than two thousand people were employed in
the organisation. However, as a result of organisational
changes, depot closedowns, and general
efficiency improvements, headcount has fallen
significantly. In the 1990s, MOL outsourced road
transportation and maintenance to MOLTRANS
Ltd. and Pentaszerviz Ltd., respectively. Due to
re-organisation, Functional Units (such as IT,
Planning & Controlling, Human Resources) were
also removed from the Logistics Unit.
Rail
Distribution
Product Pipeline
Transportation
Integrated
Logistics
Dispatcher
Services
Primary
Distribution
Barge
Loading
Crude Oil
Pipeline Supply
Surveying, Route
Supervision and
Government
Authority
Relations
President and GCEO
Terminal
Operation
Depots
Maintenance
The place of the Logistics Unit in MOL’s organisation
6
In 2002 – to emphasize the quality-maintenance
role of the Logistics Unit – the Quality
Control Unit was attached to it. In 2004, the number
of employees in the Logistics Unit increased
significantly due to the integration of Slovnaft.
Today, the headcount amounts to some 1,300
people.
Since 1996, Logistics has implemented a
Standard ISO 9001 certified Quality Assurance
System that covers all the Unit’s activities and
depots.
GCEO
Refining and
Marketing
Logistics
Forwarding
Central
Freightage
Logistics
Quality
Control
State
Reserves
(Slovakia)

The development of
pipeline systems
Significant changes occurred in the
Hungarian oil industry from the mid-1930’s
onwards. These also had an impact on logistics
activities. As part of preparations for war, capital
invested in the oil industry increased and
new refineries were constructed. Hungarian
hydrocarbon exploration was also successful;
significant amounts of crude oil and natural gas
were discovered in Zala County. With increased
production, additional efficient crude oil
pipelines were constructed and crude oil
imports ceased in 1939.
A crude oil pipeline
Between 1939 and 1942, more than 300 kms
of crude oil pipeline were laid between the Zala
County production fields and Almásfüzítô,
Pét and later, Szôny. The Csepel refinery was
supplied by the Lovászi-Bázakerettye-Újudvar-
Budapest crude oil pipeline, with a branch-line
constructed to supply Szôny and Pét. The construction
of such pipelines, together with a 100
km long natural gas and an almost 100 km long
product pipeline line, constituted a fundamental
change in the distribution area.
During World War II, the railway tanker car,
tanker barge and road tanker lorry fleets were virtually
completely destroyed. Vehicle replacement
ran into difficulties since their domestic manufacture
had been discontinued after the war.
In 1951, a new crude oil field was discovered
in the Nagylengyel region of Zala County. The
following year, Zala Asphalt Company, (the
name was later changed to Zala Crude Oil
Company) was established to process crude oil
produced there. By the time production started,
the Nagylengyel-Zalaegerszeg crude oil pipeline
was already in service, and the new refinery
received feedstock for processing through it.
7
While domestic crude oil production
increased relatively slowly in the 1950s and
1960s, consumption doubled every 7 to 10 years.
By the end of the 1950s, Hungary was more and
more obliged to import. Imports were facilitated
by long-term contracts concluded with the
Soviet Union.
Initially, imported crude oil was shipped by
rail. With sharp increases in demand, rail transport
ran into increasing difficulties – a situation
also experienced by other Central-European
socialist countries. On the recommendation of
the Soviet Union, the issue of a more economic
way of transporting crude oil by pipeline was put
on the agenda. Under COMCON, an agreement
was soon made to construct the Friendship
crude oil pipeline system, which would connect
oil fields along the River Volga with Poland, East
Germany, Czechoslovakia and Hungary.
A Friendship crude oil pipeline receiving station in Hungary
The construction of Friendship I, the section
of the pipeline going through Czechoslovakia to
Hungary, with a capacity of 3.5 million tons per
year, started in 1961, and the section to
Kápolnásnyék was commissioned as early as
the following year (crude oil being further
transported to Szôny via a pipeline constructed
during WW2). The first shipment arrived in
September 1962. The branch line to Százhalombatta
was completed in 1965, so the
imported crude oil could be delivered to the
Duna Crude Oil Company, commissioned in the
same year. A pipeline was also built to link up oil
fields discovered in the meantime, in the Great
Hungarian Plain; the 160 km long Algyô-
Százhalombatta pipeline, with a capacity of 2
million tons per year, was completed in 1970.

As the country’s crude oil consumption and
imports increased year by year – and the industry
policy of the time forecasted further dynamic
increases – it became obvious in the second half
of the ‘60s that the Friendship I pipeline and rail
transportation would not be able to meet
increasing demand. So plans were set in motion
to construct a pipeline of higher capacity, which,
in addition to the Százhalombatta refinery,
would also be able to supply Soviet feedstock to
the planned refinery at Tiszaújváros, (then
Leninváros). The pipeline Friendship II agreement
was signed in Moscow in 1969. The branch
line of the main pipeline in the Ungvár region,
entering Hungary at Tiszaszentmárton, was
completed in 1972, with a maximum annually
capacity of 7.9 million tons.
Industry forecasts predicted an unbroken rise
in crude oil consumption – to reach 20 million
tons annually by 2000 – the provision of which
would require new sources of supply and the
construction of a new pipeline. Pursuant to the
Adriatic Crude Oil Pipeline Convention, signed
in 1974, a pipeline with an annual capacity of 10
million tons, starting out from Omisalj in
Croatia, was to be constructed by 1978, and be
connected to the Friendship pipeline system.
The pipeline would enter Hungarian territory
in the Berzence region, and end at Százhalombatta.
GERMANY
CZECH REPUBLIC
AUSTRIA
POLAND
SLOVENIA
ITALY CROATIA
Adria
BOSNIA AND
HERCEGOVINA
SLOVAKIA
Százhalombatta
HUNGARY
SERBIA-
MONTENEGRO
BELARUS
ROMANIA
Friendship
MOLDOVA
BULGARIA
UKRAINE
RUSSIA
The Friendship and Adria crude oil pipeline systems
8
12000
10000
8000
6000
4000
2000
0
Domestic production
Other import
Soviet / Russian import
Developments in domestic crude oil production and
imports
Initially, the Adria pipleine supplied Hungary
with Iraqi and Iranian crude oil, however, due to
high transit charges, Soviet (then Russian)
imports could not be replaced. Supplies were
also delivered via both the Adria and Friendship
I pipelines. During the time of the Yugoslav
wars, pipeline operations were stopped, and
deliveries have been irregular, ever since.
By 1978, the current 850 km long crude oil
pipeline system had been developed, with a
capacity more than sufficient to secure the
country’s current crude oil needs. (The increase
in demand forecasted in the decades before, has
not transpired.)
Since 1992, crude oil comes almost exclusively
via the Friendship II pipeline, however, to
ensure supplies, the Friendship I and Adria
pipelines also play important roles. A significant
advantage of the Adria pipeline is that, as a
potential competitor, it strengthens MOL’s
bargaining positions with Russian suppliers. In
addition, this pipeline represents a potential
means of transiting Russian crude oil to the
Adriatic Sea, from where it can be transported
by tanker as far as North America.

During the second third of the 20th century, the proportion
of hydrocarbons in world energy supplies
increased strongly. Today, huge amounts of crude oil,
more than 10 million tons daily, “hits the road” from the
producer to the consumer. Due to geological and topographical
conditions, the large producing and consuming
countries are a long way away from each other.
Such great distances have raised the importance of
transportation’s role, and the selection of optimal transportation
means has become crucially important.
Major international crude oil transport routes
It is vitally necessary to minimise crude oil product
distribution costs. Although such products are transported
shorter distances, typically, narrow margins
cannot bear high logistics costs.
Rail and road transportation are justified primarily
for the distribution of smaller quantities, over shorter
distances. Their investment costs – provided their
services are available – are relatively low, but operating
costs are relatively high.
a VLCC (very large crude carrier)
Due to the favourable economics of transportation
by water, the largest share of intercontinental crude
oil shipments is forwarded by sea. Such transportation
is served by about 3,500 oil tankers.
9
The history of crude oil transport by sea dates
back ca. 100 years, during which the average size of
vessel increased on an on-going basis, while transportation
costs decreased. Today, more than 400
vessels are in the so-called VLCC (very large crude
carrier) category, each capable of transporting
between 160 and 320 thousand tons of crude oil.
Even larger tankers, ULCCs (ultra large crude carriers)
have also appeared. The only real disadvantage
of transportation by water is that it is geographically
limited. The best way to distribute crude oil across
continents is by pipeline.
The main advantages of pipeline distribution are
continuity of transportation, adaptability to geographical
conditions, and safety. In addition to the environmental
and economic aspects, it is also important to
remember that pipeline distribution losses are the
lowest.
Although the amount of iron used in pipeline construction
approaches that necessary for a railway of
the same length, maintenance and operating costs
are only a fraction of those of railways, primarily due
to the low energy and physical labour used. However,
the main disadvantage is high capital cost.
4
3
3
specific cost
2
2
1
1
0
50 km 100 km 150 km 200 km
Proportion of costs by distribution method,
by various distances
road
rail
barge
pipeline
The diameter of crude oil pipelines is typically
between 4 and 12 inches, but for example, the
Trans-Alaska pipeline is 24 inches in diameter. Most
product lines are typically smaller. The United States
of America has the most extensive pipeline system.
Including product pipelines, it is approximately
200,000 miles long (320,000 kilometres). The ex-
Soviet member states also have a significant pipeline
network, which plays an important role in the supply
of crude oil to Europe.

The planning of crude oil supply
The scheduling of crude oil supplies is prepared
through by plannning a Duna Refinery
Distillation Unit monthly processing programme.
When defining daily schedules, Fényeslitke and
Százhalombatta storage yard capacity must be
factored in along with adequate stock levels and
possible transit shipments. Additionally, smooth
transit flow through pipeline network must be
aimed at when making supply plans.
The reception and metering of crude oil arrivals
via the Friendship II pipeline takes place at
Fényeslitke, near the Ukrainian boarder, in the
presence of representatives of MOL and
Transnieft, the operator of the pipeline in Russia.
Assessment of crude oil quality is made at an
accredited laboratory. To ensure continuity in
reception and delivery, crude oil flows into one of
four 20,000 m 3 storage tanks - one receiving product,
one discharging product, one settling product,
and one either storing crude oil, or being out
of service.
Fényeslitke-Százhalombatta pipeline section
capacity – depending on the number of transport
pumps in action – is 600 to 1080 m 3 per hour. Crude
oil arrives at the Százhalombatta refinery where it
flows into storage tanks via a metering loop.
Not every crude oil product can be transported
via pipeline. Basically product viscosity
and product components, or the effects of
their chemical properties on pipeline materials
define their suitability for transportation.
Heating oil is only suitable to a limited
degree, and bitumen is not at all suitable for
pipeline distribution.
Due to its potential for high corrosion,
pipeline wall thickness must be checked
more frequently than normal when chemical
naphtha is transported. To perform this task,
so-called intelligent “pipe pigging” is used.
10
Product lines
kt
12000
10000
8000
6000
4000
2000
0
Gasoline Gas- and heating oil Fuel Oil
Development of major crude oil product consumption
in Hungary
In Hungary, motor car travel developed at a
high rate between 1966 and 1975, while significant
modernisation in agriculture was also taking
place. These developments resulted in a significant
increase in demand for oil products. The
crude oil product marketing network had to be
updated accordingly, which was the responsibility
of Ásványolajforgalmi Plc. (Mineral Oil
Marketing Company, called ÁFOR after 1957),
established in 1948. In the early ‘60s, this company
carried out the marketing of products by
operating many hundreds of low capacity (50 to
100 m 3 ) depots. At that time, almost all the larger
railway stations had oil product storage farms
on site, supplied by rail tanker car.
The first product pipeline between Szajol and
Százhalombatta was commissioned in 1965. The
company built an over 1200 km long product
pipeline network, mostly in the 70s, connected
to 20 modern distribution depots, many of the
smaller ones being closed down. In 60 to 400 m 3
per hour capacity pipelines, typically 6, 8 and 12
inches in diameter, eleven high capacity distribution
starting pumps ensured the transmission
of crude oil products. This product network was
designed to interconnect with refineries, starting
from Százhalombatta, and allowing product
transmission among various refinery sites.

Pipeline transmission system
The Százhalombatta and Tiszaújváros refineries
are connected by two two-way pipelines via
Szajol. Their approximate capacity of 2.5 million
tons per year makes it possible to transmit
petrol components and diesel feedstock from
Százhalombatta to Tiszaújváros in addition to
suppling feedstock to TVK Plc. Two further
pipelines operate between Százhalombatta and
Komárom, offering the excellent option of loading
goods for export onto barges for further
transportation by water. Up until 1984, when
crude oil processing stopped at Komárom, one
pipeline supplied oil to the Komárom Crude
Oil Company.
Several power plants, as well as TVK Plc. and
Ferihegy Airport, are directly connected to the
MOL Group product pipeline system. High
importance is attached to the Eastern pipeline
(formerly known as Solidarity) which connects
to the Ukrainian and Russian product pipeline
systems, through which diesel oil with 0.2 %
sulphur content is received by the Tisza Refinery
for desulphurisation.
The product pipeline system delivers engine
petrol and diesel to eight logistics depots
(Csepel, Szajol, Komárom, Pécs, Székesfehérvár,
Ebes, Dombóvár, and Füzesabony).
Only the Algyô depot is supplied by rail. (The
largest share of transport from depots is by
road, but deliveries – primarily for export – are
also performed by barge and rail.)
11
Operation of product pipelines
Over the last few decades, the quantity of product
distributed by the pipeline system has increased significantly,
and the product range has been greatly
expanded. Today, the volume of weekly deliveries
amounts to 200 to 240 thousand tons, and dozens of
product types (engine petrols, diesel fuels, chemical
feedstocks, power plant fuel oil, JET-A1 aircraft fuel
and semi-finished products) are distributed by
pipeline.
For efficient pipeline distribution, a 3-4 day programme
is prepared twice a week, that comprises
sales requirements, materials in the pipelines, depot
turnovers and stock levels, forecasted refinery output,
various means of transport (road, rail, barge),
purchase orders from customers who receive goods
via pipeline (e.g. MALÉV and TVK), and the availability
of support facilities. After discussion and agreement,
the Central Dispatcher Service is given the
programme to implement.
Distribution by pipeline may only take place if conditions
for safe distribution are in place at both sending
and receiving points, and along the pipeline, and if
the product to be distributed is available in adequate
quantity and quality. Subsequent deliveries of crude
oil products by pipeline is made using the so-called
”plug” transportation method. To permit the separation
of products of different quality – in addition to
maintaining their quality – the exact location of 30 to
40 “product plugs” must be simultaneously monitored
within the pipeline network.
The separation and metering of in-coming product
grades takes place in depot receiving stations.
Separation is mainly performed by measuring product
density and colour and by shipment data. The phase
oil generated in transit when various products
“meet” is separated and returned to the refinery for
re-processing. Only then may discharge into storage
tanks commence.

Developing today’s pipeline
management and supervisory
system
By the 1990s, the average product pipeline
was over 20 year’s old, however, 50 year-old
pipelines and 30 year-old pumping stations were
also still in service. Metering equipment installed
at transfer/delivery points was obsolete, making
the accounting of quantities delivered problematical,
thus tank-level gauging had to be used
anew, in some cases. Moreover, the monitoring
and management system was also not in compliance
with requirements of the time. All these factors
together threatened the operational reliability
of pipeline distribution operations.
Product mixing presented additional problems.
The so-called “multi-batch” transport method
used in the distribution system involved different
products, already blended to reach their desired
qualities, being sent down the pipeline without
the use of a separating element, thus coming into
direct contact and thus mixing with each other.
Separation of different products was performed
manually - for example, on the basis of colour.
Among the others, methods of definition of a suitable
product sequence was used in order to try to
reduce mixed amounts (mixed product had to be
forwarded to the Zalaegerszeg refinery for re-processing,
thus increasing costs significantly).
From the beginning of the 1990s, pipelines were
frequently drilled by product thieves, which, in addition
to economic damage caused to our company, also
resulted in serious environmental pollution. It became
obvious that of all the facilities operated by MOL, the
pipeline network was both the most exposed to unlawful
human intervention, and, at the same time, the least
protected. However, the feasibility of classic security
/protection measures (fences, cameras, guards) was
limited, and thus only up-to-date electronic monitoring
techniques could hope to provide on-going security.
The monitoring system
12
To increase security, an upgraded metering
project was launched in 1994, followed by the
introduction of the crude oil and product
pipeline operations monitoring system.
The monitoring system provides full, centralised
supervision of the pipeline network. This
is a complex system comprising remote actuation
and data inputting, and product monitoring
modules, covering MOL’s total crude oil and oil
product pipeline system. For implementation of
this monitoring system, MOL and Cason Plc.,
which was involved in the installation work,
were awarded an Innovation Prize in 1999, followed
by special recognition by the Chamber for
Innovation in 2004, in acknowledgement of the
additional upgrades.
The monitoring system performs four basic
functions:
– process supervision
– product monitoring
– leakage and breakage detection
– excise accounting (the product pipeline system
functions as an bonded storage facility)
The GEOFLO flow computer used for metering products
(subject to excise duty)
Communications within the system were set
up in a completely new way using wireless data
transfer (GPSR). Its function, in addition to
transmitting process data – flow rate through the
pipeline, density, pressure and temperature – is
to monitor the security of the pipeline area, and
detect intruders. The new system’s benefits are
significant – some 50% reduction in operating
costs, primarily because of the “intelligent”
devices installed transmit data only if a change
occurs in the above-mentioned parameters.

The other great advantage of the wireless
data transfer system is its very high rate of operating
performance, a typical index of which is
99.9 % availability.
Since 1999, this modern control system, with
minimum personnel, has facilitated the forwarding
of products to wholesale fuel depots to meet
changing customer demand. Lower stock levels
than previously needed have today become a
norm – on both the seller and the buyer sides –
while safety and security of supply has not been
impaired.
A very significant achievement, in addition to
the monitoring system upgrade, is the accurate
separation of product in the pipeline, with no
deterioration in quality. This is because the location
of specific materials (product “plugs”) is
always known accurately, and thus the mixture
generated when two products “meet”, which cannot
be sold as a product, and can only be used for
re-processing, can be reduced to a minimum.
Central dispatch room
13
The system provides a very low rate of oil loss
since leaks, spills and illegal siphoning can
immediately be detected in the logistics dispatch
centre, together with an accurate determination
of the precise threat point, along the
pipeline. Detection and location are based on
excellent surge admittance property of liquids.
At such times, the primary goal is the fast
response, so that damage caused by product
loss and leakage may be minimised. MOL and
Cason plan to install a net made of thick fabric,
positioned some 2 feet above the pipeline to be
constructed to transport twin products between
the Százhalombatta refinery and the TVK
Tiszaújváros process unit. This net, when
touched, will sound the alarm even before physical
damage is done to the pipeline.

Changes in the role of
rail transportation
Railways still play an important but decreasing
role in the transportation of refinery products,
namely the expedition of exports, and the
provision of feedstock to refineries. Currently,
the most important rail transport tasks are:
– feedstock supply
– transportation of “twin products” generated
by TVK (until the new Százhalombatta-
/Tiszaújváros pipeline is ready)
– supply to the Algyô wholesale storage
depot, which has no pipeline access
– export deliveries
– services to customers (limited to the few
who have the necessary railway sidings
and discharge gantries).
Owing to the nature of the products, rail distribution
requires special tanker cars. Our company
employs both its own and leased transport (the
proportion of our own rail tanker cars being hardly
more than 10 %), and is aiming to use blocktrains
for distribution purposes in future.
Unlike so-called “dispersed traffic”, deliveries
by block-train in general, accrue lower
freight costs, faster forwarding, and a more
efficient and economic use of specialised
transportation. A pre-condition to implementing
the block-train concept is the size
of demand for relatively large quantities.
The Százhalombatta refinery has 3 high-capacity
rail loading gantries in place for the loading of
diesel, motor gasoline grades, aromatics, JET-A1
aircraft fuel, heating oils and other products.
Their combined loading capacity totals 2.5 million
t/year. In addition, another rail tank-car loading
gantry, with a capacity of 150 thousand t/year, is
operated for liquefied gases, whilst loading of
base oils, bitumen grades and sulphur into rail
tanker cars is also possible. Some 1.2 million
tons of product are distributed by rail from the
refinery, annually. A significant proportion of rail
deliveries to the refinery concerns domestic
crude oil and LPG, the BT fraction from TVK Plc.,
styrene and imported products (naphtha and
kerosene). Rail deliveries to the refinery amount
to about 1.5 million tons, annually.
14
The rail point-loading gantry at the Tiszaújváros
refinery loads diesel oil exclusively for
export. The annual quantity delivered by rail
totals about 200 thousand tons. Tiszaújváros
receives LPG and iso-pentane by rail, which are
then used as gasoline blending components.
Some of the logistics depots (Komárom,
Székesfehérvár, Pécs, Ebes, Szajol), which are
supplied by pipeline, also expedite products by
rail, primarily to export markets. The Algyô
base depot, which is supplied by rail, typically
receives goods from Szajol.
Rail transport
The role of rail transport will gradually fade
into the background in the long term. Whereas,
in the past, it was of great importance to heating
oil distribution, today, owing to refinery
upgrades, and in particular to residue processing
upgrades, executed in line with changing
environmental regulations and market demand,
the production of heavy, sulphur-containing
heating oil has been discontinued, and low sulphur
heating oil has lost market share. At the
same time, with the upgrading of residue processing,
commissioned in November 2001, a
new product, petcoke, was launched, the transportation
of which is primarily carried out by rail.

Loading petcoke into rail wagons
Trends clearly show that the shares of
pipeline and road tanker lorry distribution have
increased at the expense of rail. Increasing road
transportation is also due to the profile of
today’s customers, since the majority of endusers,
the most important target group, is technically
unable to receive and discharge rail
tanker cars.
Moreover, customers mostly purchasing
small or medium annual quantities, operate with
relatively low inventories, partly due to limited
storage capacities, and partly to reasons of
liquidity. Thus, these customers order frequently
and relatively small quantities for one occasion
and, in order to meet this demand, a much
more flexible type of transportation than rail
is required.
Shares by transport type – 1997 and 2004
15
Transportation by barge
More economic than rail, transportation of
crude oil by barge was used as early as the 19 th
century. The use of barges to transport petroleum
products only started in Hungary in the
1950s. Initially, heating oil was shipped from
Komárom to Csepel by barge, and later diesel
oil was distributed by barge from Százhalombatta
to Ordas, located near Kalocsa, from
the 1960s onwards.
Barge loading gantry
Today, MOL’s two Danube sites – the
Százhalombatta Duna Refinery and the
Komárom storage depot – have barge-loading
facilities, from which shipments, exclusively
for export, sail to Austria and Germany. The
advantage of transportation by water is the relatively
low cost, while its disadvantage is that
navigability of the River Danube is influenced
significantly by water levels and weather conditions.
In periods of low river levels, vessels’
draughts may be limited, impacting their efficiency.
In wintertime, navigation may be interrupted
by heavy ice-floes.

Revamp and rationalisation
of wholesale storage depots
MOL inherited a wholesale storage depot
network from ÁFOR of low efficiency, broken up
into small sites, mostly obsolete, and larger in
capacity than necessary. Accordingly, network
rationalisation was started soon afterwards.
Parallel to this, the revamping of depots designated
for continuing operations in the longer
term was being carried out to a uniform concept.
Thus the goal here was to improve economically-operated
high capacity depots in
engineering and environment terms, whilst
closing down lower capacity and un-economic
storage facilities. The decision to revamp and
rationalise was made a short time after MOL
was established. The upgrade was implemented
partly with World Bank financing. In executing
this large scale project, MOL – just as in the
quality upgrading of fuels, implemented from
the beginning of 1990s – took standard and
ever more stringent EU engineering and environmental
directives into consideration, long
before Hungary entered the European Union.
This upgrade had
a jump-start due to
the appearance of
new, modern, non-
MOL owned fuel
storage depots,
Lifting a storage tank roof
into position
established to store
the country’s strategic
reserves. More-
over, owners rented their free capacity to new
players appearing on the deregulated oil industry
scene (competition in the field of storage
grew in other ways as well).
During the upgrade of the longer-term
depots, tank farms were modernised. To
reduce risk of leakage, vertical cylindrical
tanks were fitted with double- bottoms, and
internal floating roofs were installed in storage
tanks containing gasoline grades. The installation
of double walls in underground horizontal
cylindrical tanks was also implemented.
16
Tank farms were also equipped with state-ofthe-art
electronic level gauging and process control
systems. Through listed upgrades – in addition
to compliance with statutory specifications – envi-
Tank farm
ronmental pollution was removed, or minimised,
the evaporation losses encountered during storage
and distribution were significantly reduced,
and MOL inventory management efficiency was
improved through the creation of a modern and
accurate inventory monitoring system.
Before this, tanks had been fitted with
fixed roofs where large or small volumes
of vapour volume could appear between
liquid surfaces and roofs, at a rate according
to discharging. In tanks with floating
roofs, roofs are always located at liquid
level so, no such vapour can develop. This
system reduces the chance of explosive
mixture developing in tank volume, loss
arising from tank venting, and the burden
on the environment due to evaporation.

At the same time, the closing down of obsolete
and uneconomic depots was started - a long
process implemented step-by-step over the
years, that is still in progress today. In 1992,
whereas 63 such depots were in operation in
Hungary, by 1994 there were only 40 to 45, and
this number was further reduced to 21 by the
end of 1995. In 1996, a fresh wave of “rationalisation”
occurred. Low capacity depots at
Salgótarján, Sátoraljaújhely, Baja, Békéscsaba,
Cegléd and Ócsa (all without pipeline connections
except the last two) were closed down.
Vertical cylindrical tanks and other equipment
were demolished, underground tanks removed,
required earthworks and soil replacement
(necessary mostly for old “railway” depots)
completed, and groundwater cleaned. Minor
environmental follow-up work is still in progress.
By closing smaller depots, depot supply
costs were reduced, capacity utilisation
improved, and significant savings in operating
costs accrued. To optimise depot inventory levels,
to ensure trouble-free discharge, and to fully
comply with Excise Duty Act requirements, it
has become vital to keep accurate records of
inventories in depots and in transit, and to operate
the different depot systems in a coordinated
manner. This has been achieved by the development
and introduction of depot monitoring systems.
The reliability and general standards of
customer service have had to be improved to
cater for engineering, computer and organisa-
MOL’s current domestic wholesale depots
and depots closed or to be closed down
between 1993 and 2006
Vép
Zalaegerszeg I. telep
Nagykanizsa
Mosonmagyaróvár
Gyôr
Csorna
Veszprémvarsány
Sümeg
Marcali
Barcs
Kaposvár
Komárom
Székesfehérvár
Tata
Százhalombatta
Simontornya
Csepel
Dunaújváros
Kalocsa
Dombóvár
Tolna-Mözs
Bonyhád
Baja
Pécs
Szécsény Salgótarján
Bp. Gyömrôi u.
Ócsa
Cegléd
Füzesabony
Kecskemét
Kistelek
Szajol
Szentes
Algyô
Miskolc
Tiszaújváros
Orosháza
Polgár
Békéscsaba
17
Szeghalom
Loading a tanker lorry
tional upgrades executed in parallel, and to meet
the needs of improved planning accuracy.
Today, other upgrades are also in progress: they
focus firstly on the upgrading of process control
software, used by road tanker lorry loading stations.
By doing so, the reliability of accounting
of quantity of expedited products has increased.
Sátoraljaújhely
Remaining depots
Product pipeline
The risk of overfilling a road tanker lorry may
either be caused by human error, or by failure of
the automatic gantry meter. This device, used to
prevent overfilling when bottom loading, is an
electronic system called LIBERTY. Connected to
the road tanker lorry, this device detects when
its compartments are full, and stops the loading
procedure automatically. When top loading, the
driver keeps a switch closed throughout the
loading process, which, if released, causes loading
to shut down immediately.
Nyíregyháza
Nyírbogdány
Date of
closure:
1993
1994
1995
1996
1999
2000
2004
2005
2006
An additional objective
has been to make loading
activity more efficient and
safe through use of protection
against overfilling, on a
broad scale.

Development of the tanker lorry fleet
As early as the 1950s, just like today, transport
of products from logistics depots was primarily
carried out using purpose-built tanker lorries.
The ÁFOR fleet then consisted of 70 to 80
vehicles, with a typical capacity of just a few
thousand litres. In addition to motor gasoline
and diesel, vacuum residue and kerosene were
also frequently transported by road. Since the
number of filling stations was very low – 60 to 70
in all – supply to important end-users, among
them a large number of industrial plants, naturally
took on a higher priority.
Semi-trailer type Tanker Lorry
With the increase in consumption of petroleum
products and with the gradual expansion of
the filling station network, distribution tasks
increased at a fast rate. In the 1970s, the number
of tanker lorries reached 300, but gradually
decreased thereafter.
Following the change in political régime, the
task of effectively meeting demand from new
retail players, in addition to that caused by economic
diversification – the partial disappearance
of traditional large consumers and the
simultaneous appearance of large numbers of
new ventures – and the need to satisfy the
requirements of ever-increasing competition,
combined to present a significant new distribution
challenge.
18
Automated tanker lorry filling gantry in Százhalombatta,
on the territorry of Danube Refinery
The modernisation of road tanker fleet, in
connection with improvement of wholesale storage
depots meant the purchase of up-to-date,
high-capacity tanker lorries, in line with new
technology, which permitted much higher loading
rates compared to the previous ones, and
the removal of low-capacity obsolete vehicles
from service.
The current vehicle pool operated by
MOLTRANS Ltd consists of hardly more than
one hundred tanker lorries, but their average
size, however, is much greater than those made
obsolete. The majority of these larger vehicles is
of the semi-trailer type. Semi-trailers have 35m 3
capacity aluminium tanks split into 5 compartments
and equipped with two flow meters. For
customers ordering smaller quantities, or for
delivery to locations where larger vehicles cannot
gain access, deliveries are made using
smaller, rigid tanker lorries with a capacity of
13 m 3 to 15m 3 .
Automated top loading of a tanker lorry

Vehicles equipped with pumps are also used
to fill above-ground tanks. As a result of ongoing
improvements, the majority of tanker lorries
is very modern and reliable. Between 2004
and 2005, 45 new tractors for semi-trailers were
purchased, and the renewal of tanker lorries and
semi-trailers continued (which means improvements
in metering systems, and the installation
of pumps and turbine-discharge systems).
LPG tanker lorry
Since the fuel demand varies seasonally,
from time to time MOL hires freight services
from third-party hauliers; the requirements set
for the latter are as stringent as those applied to
MOL’s own tanker lorry fleet.
The majority of MOL’s 7000 current domestic
wholesale customers is supplied with fuels,
LPG products, bitumen and other crude oil
derivatives through use of both MOL-owned
and contractor tanker lorries.
19
The establishment of a Central Freight
Logistics Unit
Whereas purchase orders used to be
received and fulfilled by individual depots, since
2002, both order-taking and freight dispatching
– in respect of road distribution – have been performed
centrally.
Customer orders are received through several
channels – telephone, fax, or email – and then
recorded in the ERP (SAP) system of the Company.
Based on the status of orders, depot inventories
and tanker lorry availability for the following
day, the Central Freightage Logistics Unit
decides, using a scheduling and optimising software,
from which depot and which tanker lorry
will supply an individual customer.
Supplies to MOL Filling Stations are performed
using the same system, based on continuous
monitoring of their inventory levels,
and daily sales figures. When “allocating”
transport tasks, the size and type of tanker
lorry (e.g. equipped with pump) that individual
customers are technically capable of receiving,
must also be considered.
After the closure of the Vép depot, near
Szombathely, in 2005, supplying customers in
Western Hungary was carried out by Slovnaft’s
Bratislava refinery, in Slovakia.
MOL promises to supply motor fuels – the
highest proportion of its fuel sales – the workday
following date of order. Deliveries are typically
made during work-days because supplying
over weekends is restricted by “truck stop” laws.

Logistics of Chemical products
TVK, the leading company in the Hungarian
petrochemical industry, is a member of MOL
Group. MOL supplies TVK with feedstock, most
of the 1.7 million tons of petrochemical feed
(naphtha, petrochemical grade diesel) being
transported to TVK through a 236 km-long
pipeline from the Százhalombatta refinery.
The remaining free capacity of this pipeline is
used by MOL to supply its Tisza Refinery, as
well as the Region, with diesel components, or
gas oil end-product.
Ethylene tank at TVK, with a pipeline in the foreground
MOL purchases by-products, generated during
the TVK pyrolytic process, and uses a small
portion of them (low-sulphur xylene fraction) in
the Tiszaújváros refinery, and the rest (benzenetoluene
fraction, high-sulphur xylene fraction) –
in the Százhalombatta refinery. The low-sulphur
fraction arrives at the Tisza Refinery by pipeline,
whilst the benzene-toluene (BT) and high-sulphur
xylene fractions are transported to Százhalombatta
by rail.
Present construction of a new transport pipeline
between Tiszaújváros and Százhalombatta is
expected to be completed by the end of 2006. This
pipeline will be capable of delivering benzenetoluene
fraction and xylene fraction to Százhalombatta
(a total of 278kt/year) with free capacity being
used for the movement of other chemical products.
In light of increases in quantities of feedstock
and by-products to be transported, MOL is carrying
out large-scale modernisation measures,
both at Tiszaújváros and Százhalombatta, to
provide the technical conditions required for
increased logistics capability.
20
Quality Maintenance function
of the Logistics
It is a priority goal of the Logistics and its
operators to maintain product quality. Products
must meet quality specifications all along the
line, not merely “at the refinery gates”, but at
Filling Stations and wholesale purchaser premises,
at the moment of on-site product discharge
into storage tanks. Up to the mid-90s,
several justifiable complaints were raised
about MOL product quality, which, in some
cases, could be traced back to deficiencies in
logistical equipment and procedures in force at
the time.
These problems occurred despite the fact
that the refineries were producing products
with significant ”quality reserve”. In the second
half of the 90s, efforts were made to
improve Logistics capability to maintain quality.
This involved some engineering/process
upgrades (e.g. elimination of former corrosion
problems), the implementation of very detailed
and stringent Logistics process regulations
and the strengthening of Quality Control
measurements.
Quality Control laboratory

Storing strategic stocks
Establishment and functions of the International
Energy Agency (IEA)
In 1973, when oil prices shook world markets,
and with developed industrialised countries meeting
a significant portion of their crude oil demand
from imports, the need to stockpile reserves of
crude oil and petroleum products became clear,
and thus the International Energy Agency (IEA)
was established in 1974. Its most important function
was to guarantee the security of energy supplies.
To partly reduce their dependence on crude
oil imports, member countries – with the participation
of market players, and in an environment free
of competition – established reserve stocks to be
used under controlled and agreed conditions.
These stocks may be released only in cases of
serious interruption to crude oil and petroleum
product supply that upsets the balance between
production and consumption. Like the European
Union, this organisation specifically obligates its
members to stockpile inventories equal to their
90-day consumption levels.
Establishment and functions of Association of
Crude Oil & Petroleum Product Stockpiling
(KKKSZ)
The need for a market-based energy reserve
in Hungary became clear after its conversion to
a market economy. At the time, the country only
had reserves of liquid hydrocarbons sufficient
for 2 to 3 weeks, but there had been times when
inventories dropped to a 4-day supply level. In
1993, as the first ex-socialist country to do so,
Hungary introduced legislation based on IEA
directives, and in line with Western European
practices. The 1993 Act Number IL prescribed
the strategic stockpiling of crude oil and the
establishment of the Association of Crude Oil &
Petroleum Product Stockpiling (KKKSZ).
By the end of 1998, KKKSZ had created more
than 1.2 million tons of crude oil and petroleum
product reserves that can provide 90 days of
trouble-free consumption for the country. In
doing so, Hungary both satisfied the obligations
set as a pre-condition to joining both the EU and
the IEA, and the provisions of the Act.
21
The Association initiated five storage companies
(IPR Celdömölk, IPR Vámosgyörk, Petrotár,
Kôolajtároló, and Terméktároló) which by now
are owned fully or partly by KKKSZ. During the
last 10 years, these companies have established
new modern storage capacities.
Storing emergency reserves
MOL Plc. regularly participates in open
KKKSZ tenders for storage and procurement.
About one third of the Association’s inventories
are stored at MOL depots on the basis of
long-term availability contracts. Established
with a majority MOL ownership in 1996,
Kôolajtároló Plc. has constructed crude oil
storage tanks for reserve stockpiling purposes,
each with a capacity of 80,000 m 3 , 4 of
them at the Duna- and 2 others at the Tisza
refineries; the company was acquired by
KKKSZ in 2001. Commissioned by KKKSZ,
MOL also stores petroleum products at its
Komárom and Szajol depots, in addition to
those at its two refineries.

Business relations between
MOL and NATO
Business relations between MOL and
NATO go back 10 years. MOL regularly submitted
tenders for supply of fuel to NATO, for
the South Slavic countries, and was awarded
contracts in several cases.
US Government representatives contacted
MOL for the first time in early November
1995 – prior to Hungary’s entry into NATO –
regarding the matter of providing, storing and
supplying JET A-1 aviation fuel. Following
many rounds of negotiation agreement was
reached for MOL to make available the total
storage capacity of its Dombóvár depot, with
the required operational structure, to the US
Government.
This contracting process was preceded by
significant technical preparation. The whole
depot had to be emptied, tanks and pipelines
flushed and cleaned. It also became necessary
to rearrange technological systems at the pumping
station and the road tanker lorry loading
gantry, and to purchase and install special filters.
A suitable additive-dosing system had to be
configured, and other process equipment purchased.
In 1999, Ferihegy Airport was the base
for military operations over Bosnia.
NATO fuel transport aircraft
For departing fighter helicopters, MOL
supplied fuel under an “into-plane” contract,
partly from its own production, and partly
from imports, since demand exceeded
MOL’s refinery capacity.
22
Discharge of product shipped by barge was
performed in the logistical facilities at
Százhalombatta, and then – together with locally-produced
fuel – JET A-1 was delivered by
pipeline to Ferihegy Airport. All this required
extremely well-orchestrated production, commercial
and logistical activities, to meet the high
standards expected by NATO, both in terms of
product quality and logistical services.
In September 2005, the Hungarian Ministry of
Defence concluded a contract with MOL whereby
the company agreed to place specified storage
capacity, together with transport and loading
equipment, all meeting required technical
standards, at the disposal of NATO in emergency
situations, and, if required, to provide aviation
and motor vehicle fuels to meet NATO
demand. For the very first time in the history of
NATO the need for supply of large amounts of
fuel was resolved not from military-operated
storage facilities – the construction and maintenance
of which would have required significant
expenditure – but, in Hungary, through a longterm
leasing of MOL depot facilities, necessary
in a national economy anyway, and requiring
less upgrade measures. The airfield at Kecskemét
is connected to a pipeline which permits
direct access to MOL’s distribution system. The
revamp of these external storage facilities and
pipeline construction were funded from NATO
resources.

MOL and the airline industry
At most airports around the world, aircraft
fuel is supplied directly by oil companies, under
so-called “into-plane” service agreements.
In Hungary, the most significant airport fuel
supply operations take place at Ferihegy
International Airport. Here, the aircraft refuelling
company Repülôtéri Üzemanyag
Kiszolgáló (RÜK) delivers 70 % of fuel supplies
to aircraft, in addition to meeting Hungarian
national carrier MALÉV demand, thus accounting
for the refuelling needs of most airlines
using the airport. RÜK Ltd purchases JET A-1
fuel from MOL under a delivery and commercial
contract.
In recent years, with the participation of
major foreign investors, the upgrading of other
airports around Hungary (Debrecen, Sármellék,
Gyôr-Pér) has commenced, resulting in a spectacular
increase in demand for jet fuel. By maximising
its production capacity, MOL has made
preparations to meet this demand.
23
JET A-1 (kerosene) fuel is used by modern jetengine
aircraft and turbine-driven helicopters.
The development of the jet engine to power
aircraft was started in the 1930s. The first
flight of an aircraft mounted with a jet
engine took place in Germany in 1939, the
invention of Hans von Ohain. Jet aircraft
started to be commonplace all over the
world during the ‘70s.
The most important requirement of jet fuel
is that it has to be clean, clear, and free
of water and mechanical impurities. This
must also be kept in mind in production,
marketing and use.
Delivery of kerosene requires extreme
care, whether by pipeline, tanker lorry
or other means.
To satisfy JET A-1 fuel demand, MALÉV constructed
a 38km pipeline between Százhalombatta
and Budapest Ferihegy Airport in
1983/1984. MOL’s legal predecessor, ÁFOR,
commissioned this kerosene supply pipeline,
and MOL still operates it to this day.
Passing through a variety of filters, JET A-1
refuels aircraft under strict quality control.

MOL Group’s regional logistics
system and its activities
The target market for the sales by MOL
Group is the Mid-East-European region, which
includes Hungary, Slovakia, Poland, Czech
Republic, Austria, Romania, Serbia-Montenegro,
Bosnia, Croatia and Slovenia. These are the
areas that can be – partly or fully – supplied economically
from MOL Group’s wholesale storages
connected by pipeline.
MOL Group’s share in the fuel market in the countries
of the region
For a decade MOL has been trying to
increase its sales and strengthening its market
positions in the Mid-East-European region. From
the mid 1990’s the regional expansion meant
primarily the construction of filling stations in
the countries neighbouring Hungary. Starting
from 2000 the company increased its markets
through a set of acquisitions: in 2000 it obtained
minority share followed by majority share in
2002 in the Slovakian oil company Slovnaft, in
2003 became 25 % owner of the Croatian INA,
and in 2004 purchased both Shell’s Romanian
subsidiary and the majority share in an Austrian
oil product marketing business Roth Heizöle.
MOL, Slovnaft and INA are all market leaders
domestically, and also have significant positions
in the other countries of the region.
24
Slovnaft railway tanker car
The logistical system of MOL and Slovnaft
operates in an integrated manner under a joint
management. Its strengths are the possibility of
crude oil purchase via pipeline and operating the
nearly 1700 km long product pipeline system with
an efficient fuel storage depot system; the latter
has a key role in the supply to the domestic markets.
In order to optimise the costs, the two companies
also supply each other’s domestic market:
Eastern part of Slovakia is supplied partly from
Tisza Refinery, and part of the customers in
Western Hungary receive goods from Bratislava.
Half of the products, some 6 million tons, lifted
from the MOL and Slovnaft refineries find
their buyer in third markets, mostly within the
region; based on the sales volume the most
important markets abroad are Austria and the
Czech Republic. MOL’s farthest fuel market is
Germany (Bavaria). For handling this huge
amount of goods an advanced logistical system
and harmonised activities are required.
An engine in Slovnaft’s colours

MOL’s business objectives include that the
so-called sale in “bulk”, i.e. at large quantities to
retailers without providing services should gradually
be replaced by a direct supply to the filling
stations and end users abroad. This means that
a high number of local customers are to be supplied
with relatively low quantities. Performing
this function very important expectations against
the logistical activity are in place – in addition to
the cost effectiveness – the fast response –
product delivery within a short time from purchase
order - and reliability. To satisfy these
expectations the availability of a suitable logistical
background (storage depots, transport
means) is necessary.
In order to meet the objectives mentioned
above, MOL Group had purchased the wholesale
fuel storage depot at Korneuburg, near
Vienna, from company Avanti, which after a
significant upgrading was opened at the end
of September 2003.
This depot at Korneuburg can be supplied
by both barge and rail from the refineries at
Százhalombatta and Bratislava. Through the
acquisition of the Roth Company MOL Group’s
asset inventory in Austria has been increased
with one more depot.
The depot at Korneuburg
Slovnaft’s refinery at Bratislava has a direct
pipeline connection to the Czech product pipeline
system, which facilitates a cost effective supply.
MOL Group’s high rate of presence in the Czech
Republic is supported by several depots connected
to this pipeline and also by a leased depot.
The deliveries to the customers in Poland are
made from three leased depots, which are supplied
with fuels by rail from Bratislava and Tiszaújváros.
25
The supply to the South-Slavic markets is
performed by both rail and road transport.
MOL also delivers to these countries significant
amounts of bitumen, a product typically
transported on the road to the buyer. The loading
of the bitumen transport trucks is made at
Százhalombatta.
In Romania, where MOL has a significant
retail network that provides a countrywide coverage,
Logistics has an even more important
function, since it is to ensure the supplies more
than 130 filling stations with partly MOL’s own
fuels, and partly with fuels purchased from local
refineries on a continuous basis. In order to
perform this function, Company operates its
own depot at Tileagd, and a leased depot in
Prejmer (near Brasov).
MOL Group’s logistic system
There is no pipeline connection between the
two largest refineries (Százhalombatta and
Bratislava) of MOL Group .
The feasibility of connecting the product
pipeline systems of the two countries is being
reviewed, considering the current and expected
order of magnitude and continuity of the
product flows between them. Through this
connection the Hungarian and Czech networks
would be linked in between, and a chance to
supply semi-finished products amongst the
refineries could become possible.

Notes
27