Hungary reaches deal with Gazprom on 2019 gas deliveries

Hungary reaches deal with Gazprom on 2019 gas deliveries
Hungarian Foreign Minister (right) in talks with his Russian counterpart Sergey Lavrov
By bne IntelliNews May 28, 2018

Hungary has reached an agreement with Russian gas giant Gazprom on the volume and price of next year's gas deliveries and negotiations have begun on gas deliveries for 2020, Foreign Minister Peter Szijjarto said at the Saint Petersburg International Economic Forum on May 25.

Szijjarto met Russian Foreign Minister Sergey Lavrov, Minister of Industry and Trade Denis Manturov, Gazprom CEO Alexey Miller and Rosatom deputy-CEO Kirill Komarov during his visit to Russia. 

In accordance with the agreements struck with Bulgaria and Serbia, further quantities of natural gas will be arriving in Hungary from the south thanks to the modernisation of the Bulgarian and Serbian gas pipeline systems, he added.

Some 80-85% of Hungary's natural gas consumption is covered by Russian imports, in accordance with the long-term natural gas contract between state-owned MVM, and Gazprom, which expires in 2021. 

The terms of the contract remain a business secret, but according to press reports Hungary reduced the amount of take-or-pay gas and also gained the right to re-export the gas. 

The government signed a deal with Gazprom to link Hungary with the under-construction Turkish Stream pipeline by end-2019. The pipeline will bypass Ukraine in bringing Russian gas across the Black Sea to the Turkish market and Europe. 

In February, parties announced that Hungary wants to further reduce its reliance on Russian gas by importing some 4.4bn m3 gas from Romania after 2022. "The era of Russian gas monopoly will come to an end in Hungary," Szijjarto said at the time. 

On related matters, Russian nuclear energy company Rosatom announced that it would start construction of two blocks at Hungary's Paks nuclear power plant in 2020 and that the blocks would go online in 2026 and 2027. 

"We will be opening the construction site to Rosatom at the end of February, and the implementation of the financing agreement has also begun", Szijjarto said. The expansion of the Paks power plant will guarantee Hungary’s long-term competitiveness and low public utility costs are moving forward according to schedule. 

All of the environmental permits required for construction have come into effect and are legally binding, and all EU barriers have also been lifted, he said.

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