Hungary and Croatia seek to expand Adriatic oil pipeline

FILE PHOTO: Employee walks on top of pipelines at Hungarian oil and gas group MOL's main Duna refinery in Szazhalombatta

BUDAPEST (Reuters) - Hungary plans to cooperate with Croatia to increase the capacity of the Adriatic pipeline that brings non-Russian crude to Hungary, Prime Minister Viktor Orban's chief of staff told a briefing on Thursday.

Gergely Gulyas said the government had discussed its 2030 energy strategy and this would include enabling Hungarian oil and gas group MOL's Danube refinery to process more non-Russian crude.

Landlocked Hungary in central Europe is one of the region's countries most exposed to Russian fuel imports. MOL's refinery gets crude via the Druzhba pipeline.

The Druzhba network originates in Russia and branches in Belarus into Ukraine, where it divides again to supply several countries in Eastern and Central Europe that depend on it, including refineries in Hungary, the Czech Republic and Slovakia.

"We know that if there was no crude oil coming from Russia now, then shipments could only come via the sea, on the Adriatic pipeline. But the capacity of this pipeline is only 70%-80% of what would be needed," Gulyas told the briefing.

"So this is a project of special importance, which Hungary would like to implement together with Croatia," he added.

Gulyas said nuclear energy, renewables, including solar energy, and the development of the national grid, would be central to the strategy that the government plans to finance by drawing on the European Union's recovery fund, once an agreement is reached on the money.

Brussels suspended the disbursement of EU funds to Hungary over a rule-of-law dispute, but Budapest hopes to unblock the funds by the middle of the year.

(Reporting by Krisztina Than, Editing by Alan Charlish and Barbara Lewis)