MOL says restarting units of Danube refinery not affected by fire; probe ongoing

By Anita Komuves and Krisztina Than

BUDAPEST (Reuters) -Hungarian oil and gas company MOL was gradually restarting units in its Danube refinery that were not affected by a fire that broke out late on Monday while firefighters were working on the site, the company said on Tuesday.

Firefighters contained the fire and were working on securing the area while MOL investigated the cause and assessed the damage, the company said in a statement.

"In the coming period, we will focus on Hungarian supply and consider the need to use strategic reserves," MOL said, adding that there were no injuries.

It was not immediately clear what impact the fire would have on production and exactly how much of the plant was affected.

The fire broke out late on Monday in the Szazhalombatta refinery's AV3 crude distillation unit. MOL is scheduled to hold a briefing at 1000 GMT.

The AV3 unit supplies crude oil fractions to other plants in the refinery, said Tamas Pletser, a regional energy analyst at Erste Investment in Budapest, adding that the unit represented roughly 40% of the refinery's capacity, according to his estimates. He said the incident could disrupt the refinery's production for months.

MOL can turn to the government to access parts of the strategic oil products reserves, Pletser said.

At the end of September, Hungary had strategic crude oil and petroleum product reserves sufficient to cover 96 days, according to data on the Hungarian Hydrocarbon Stockpiling Association's website.

On Tuesday, Prime Minister Viktor Orban said he had talks with MOL's leaders about the fire, adding that the country's fuel supply was secure.

"We will investigate the circumstances of the fire at the Szazhalombatta oil refinery with the utmost rigour," Orban wrote in a post on Facebook.

The Danube refinery started operating in 1965 and can process an annual 8.1 million tonnes of crude oil, according to MOL's official website.

The Danube refinery and MOL's other refinery in Slovakia are both largely fed with Russian crude via the Druzhba pipeline's southern spur.

MOL's shares were down 1.7% at 0845 GMT.

(Reporting by Krisztina Than and Anita Komuves; Editing by Jamie Freed, Shri Navaratnam and Thomas Derpinghaus.)