Hungary signs 15-year gas contract with Gazprom

Hungary has signed a 15-year gas purchase agreement with Gazprom that will ensure the country’s long-term energy security, Foreign and Trade Minister Péter Szijjártó said on Monday. The agreement led to diplomatic tensions between Ukraine and Hungary.

Under the deal, Hungary has pledged to buy 4.5 billion cubic meters of natural gas each year from the Russian energy giant over a period of at least ten years, Szijjártó said at the conference. signing ceremony Monday. Hungary will have the option to change the amount purchased after ten years, he added.

Gazprom will deliver 3.5 billion cubic meters via the Serbian-Hungarian interconnector which is expected to come into service on October 1 and the remaining billion cubic meters via Austria, he added.

The price is significantly lower than what has been paid so far on the basis of an agreement signed in 1995, and will help to ‘maintain the results of the price cuts of public services, and Hungarian consumers will continue to pay the one of the lowest prices on the European market. Union, ”Szijjártó said.

Energy security has always been a key strategic and national security issue in Central Europe, Szijjártó said. Natural gas has a key role in this in Europe as well as in Hungary, he said. The EU received 48% of its gas supply from Gazprom last year, he said.

“Hungary sees energy supply as a matter of national security, sovereignty as well as an economic problem rather than a political problem. Family homes can be heated with gas and not by political statements; and the same goes for the industry, ”he said.

A long-term deal with Gazprom is currently the safest and most reliable way to ensure Hungary’s energy security, he said. “We can make resounding statements about diversification… and while Hungary has already done its homework, many players have yet to provide the infrastructure for it,” he said.

Gazprom Vice President Elena Burmistrova welcomed the deal, saying the use of a secure and reliable energy resource such as natural gas was “particularly important to achieve climate goals”.

Tensions with Ukraine

In response, the Ukrainian Foreign Ministry issued a statement saying it would turn to the European Commission and postpone a meeting of the Hungarian-Ukrainian Economic Committee in response to the decision. The ministry said Hungary’s decision on delivery routes avoiding Ukraine was “surprising and disappointing”.

The ministry said the decision violated the principles of the Hungarian-Ukrainian Basic Treaty that the two countries signed in 1991. The decision was “purely political, and to the detriment of Ukrainian national interests and Hungarian-Ukrainian relations,” said the Ministry.

Commenting on the statement, Szijjártó deplored Kiev’s decision to postpone the committee session and said he did not see “the link between securing Hungary’s energy supply and decent cooperation with our neighbors”. “I reject the attempt to interfere in the affairs of Hungary; providing winter heating for Hungarians is our job, and no other country can get involved, ”he said.

He also said that Gazprom’s deliveries bypassed not only Ukraine but also Hungary, and that it had supplied gas to Serbia, Bosnia and Herzegovina and Croatia via Hungary, generating transit revenue, ” but now the reality has changed and another road has been built “.

“Since Gazprom has gas and we don’t, the situation is rather uneven. So whatever route they deliver the gas to, we will buy it, ”he said.

featured image: Szijjártó (right) shaking hands with Gazprom’s vice president; image by Zsolt Szigetváry / MTI

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