Azernews.Az

ZAGREB – Croatia`s oil and gas group INA, in which Hungary`s MOL seeks to become a majority owner, said on Thursday it had struck a three-year contract on natural gas supply with Italy`s oil and gas group ENI, Reuters reported.

The supply will start from Jan. 1. INA`s current contract with Russia`s Gazprom expires at the end of this month.

"Despite some open issues related to the future of INA`s gas business, INA was making efforts to secure a stable gas supply for Croatia and concluded the best possible agreement at the moment," INA said in a statement.

ENI will supply 750 million cubic metres of gas annually on average. Croatia currently consumes just under 3 billion cubic metres of gas per year and gets more than 60 percent of its demand from its own gas fields.

Croatia currently imports gas through a pipeline link from Slovenia, but it is about to open a new supply route via an interconnection to Hungary.

MOL is INA`s biggest shareholder with a 47.15 percent stake and has launched a bid to buy the remaining 8 percent of INA shares that are in free float. The Croatian government, which has 44.84 percent, has vowed to protect national interests and its position in INA, without specifying how it will do that.

The outcome of the offer is uncertain as the local institutional investors, encouraged by the government, are now buying INA shares on the local bourse to counter MOL`s bid.

The government and MOL are in talks on how to handle INA`s unprofitable gas business, which has piled up losses in recent years because of capped gas prices in Croatia.

The government said last year it would take over the gas business from INA this month, but this seems unlikely because it has no funds. MOL is now pressing the government to allow higher prices of gas on the Croatian market from next year.