UPDATE 1-Hungary's MOL to increase deliveries to Serbia after US sanctions on NIS refinery

(Adds background on Serbia sanctions in paragraph 2, adds MOL quotes in paragraphs 5 and 6, adds background on Serbia's energy dependence in paragraphs 7-10) BUDAPEST, Oct 10 (Reuters) – Hungary's oil company MOL will increase deliveries to Serbia after U.S. sanctions on the NIS refinery, Hungary's Foreign Minister Peter Szijjarto said in a statement on Friday. The United States imposed sanctions on Serbia's Russian-owned oil company NIS on Thursday, prompting neighbouring Croatia to cut crude supplies and raising concerns that the country's sole refinery may halt operations within weeks. "As MOL plays an important role in Serbia's crude oil and fuel supply… our Serbian friends can rely on increased supply from MOL," Szijjarto said, adding that this increase will not be able to fully replace the lack of shipments from Croatia. Szijjarto did not offer any details about the amount of the planned supply increase or the method of delivery. "Although our options are limited due to logistical challenges, we are committed to supporting the maintenance of security of supply [in Serbia]," MOL said in a statement. "In order to ensure reliable access to imported fuel for both retail and wholesale customers, MOL Serbia will continue to invest in expanding storage capacity, strengthening its local presence, and supporting the stable operation and growth of its retail network." NIS supplies around 80% of Serbia's diesel and gasoline demand, and 90% or more of jet fuel and heavy fuel oil. Without access to the JANAF pipeline from Croatia's Adriatic Sea, Serbia's options for crude imports at scale are limited. An oil pipeline connecting Hungary and Serbia is in the planning phase, and it could begin to meet all of Serbia's crude oil needs by 2028, Szijjarto said in April. The pipeline is expected to have the capacity to transport 4-5 million tonnes of Russian oil to Serbia through Hungary every year, the foreign minister said at the time. Ties between Serbia and Hungary have strengthened in recent years, and their long-time leaders, Hungarian Prime Minister Viktor Orban and Serbian President Aleksandar Vucic, enjoy strong relations with Russia. (Reporting by Anita Komuves, editing by Deepa Babington)

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