Hungarian Foreign Minister Agrees To Long-Term Gas Deal with Russia

Hungary has agreed with Russia on all the conditions for a new long-term gas supply deal to take effect from the 1st October, Foreign Minister Peter Szijjarto said on his Facebook page on the 30th August.

 

Mr Szijjarto said the agreement with Gazprom is for 15 years, with an option to modify purchased quantities after ten years.

 

“We have also agreed on the price, which is much more favourable than that we paid under the deal which Hungary signed in 1995, which expires now,” he said, without giving exact details.

 

He added the deal would be signed by the end of September and Gazprom would ship 4.5 billion cubic metres of natural gas to Hungary annually, via two routes: 3.5 billion cubic metres via Serbia and one billion cubic metres via Austria.

 

Gazprom said it had met the Hungarian foreign minister but did not give any details. “The sides have looked into the key issues and perspectives for cooperation in the natural gas sphere, including gas supplies to Hungary,” Gazprom said in a statement.

 

Hungary has relied on Russia for most of its natural gas imports delivered via a pipeline through Ukraine. However, in recent years it has diversified gas imports, opening cross-border interconnectors with most of its neighbours and securing supplies from Royal Dutch Shell, via a liquefied natural gas (LNG) port in Croatia.

 

Mr Szijjarto said most of the shipments under the new contract will arrive via a new interconnector at the country’s Serbian border that will be operational by October.

 

While reducing its dependency on Russian gas imports, since taking power in 2010Hungarian Prime Minister Viktor Orban has promoted Moscow’s interests within the European Union, repeatedly calling for the ending of economic sanctions imposed after Russia’s annexation of Crimea in 2014.

 

In 2014, Budapest also signed a deal for two reactors at its Paks nuclear plant with Russia, to be built by state atomic energy firm Rosatom. That project has been delayed.

 

Source: Pipeline & Gas Journal