Agreements reached to secure Hungary's uninterrupted gas and oil supply
The announcement was made by Peter Szijjarto, Hungary's minister of foreign affairs and trade, after the bilateral negotiations in Moscow.
Agreements have been reached with Russia that will ensure Hungary’s uninterrupted and continuous supply of natural gas and crude oil in the coming period, Peter Szijjarto announced in Moscow on Tuesday. After his discussions with the Russian Deputy Prime Minister Alexander Novak and the head of Rosatom, Aleksey Likhachev, the head of the ministry reported that although he can provide three pieces of good news for Hungary, it can be predicted in advance what kind of reactions his visit will provoke from the international liberal mainstream and Hungary’s domestic opposition.
“However, as long as the issue of energy supply is a physical issue and not a matter of political or ideological preference, like it or not, Russia and cooperation with the Russians will remain decisive in terms of the security of Hungary’s energy supply,”
the foreign minister pointed out. He underlined that after surviving the past winter, “It is customary to see Europeans [politicians] strut around boastfully these days”, however, the International Energy Agency recently published its “ominous” report, which forecasts that extremely serious difficulties can be expected in the next heating season, when the security of supply will be critical. On the one hand, there is no guarantee that the next winter will be as mild, on the other hand, the energy demand of the Chinese economy will increase significantly following the post-corona virus epidemic reopening, and thirdly, the necessary LNG capacities have not yet been built on the continent, he listed. Peter Szijjarto called the uninterrupted supply of Russian natural gas of fundamental importance, and as a first point he welcomed the fact that they agreed on the extension of the option, whereby, if necessary, Hungary will have the opportunity to purchase more than the amount stipulated in the long-term contract.
“Approximately 80-85 per cent of Hungary’s natural gas supply comes directly from Russia, so the continuity and uninterrupted delivery of this supply is fundamentally and critically important to us,”
he stated. Pursuant to the second agreement, the option was also extended, allowing for Hungary to defer payment on the portion exceeding the stipulated price level of 150 euros, regardless of the gas price developments. “Of course, today’s energy prices, are much lower than this, thank God, but the past year has shown that you have to be prepared for extreme situations,” he said. As a final point, he stated that Russia has also assured us that all technology, know-how and parts are at their disposal for the continuous operation of the TurkStream pipeline despite the sanctions, so this year’s maintenance and upkeep works will take place uninterrupted. He added that if this gas pipeline had not been built because of the “many friendly threats”, it would be practically impossible to supply Hungary today. The minister pointed out that in 2022, about 80 per cent of Hungary’s crude oil supply came through the so-called Friendship pipeline. Regarding this route, an important agreement was reached that the Russian supplier will continue to hand over crude oil to the Hungarian oil company MOL at the Ukrainian-Hungarian border.
Mr Szijjarto said that in order to continuously maintain the transit in Ukraine, MOL will be settling the transit fee directly with the operator of the Ukrainian pipeline network. “If the Russian company were to continue to settle the transit fee with the Ukrainian company, it could create serious uncertainty in the current situation,” the Hungarian minister of foreign trade and foreign affairs opined.
An agreement was also reached with Russia on the modification of the construction and financing contract of the Paks expansion in order to enable the continuation of the nuclear power plant investment and its delivery as soon as possible. After the meeting with Rosatom head Aleksey Likhachsov, Peter Szijjarto emphasised that the war in Ukraine and the responses to it did not facilitate the progress of the project’s expansion.
“Although we have so far succeeded in ensuring that the nuclear industry and nuclear power are not subject to sanctions measures, it is clear that in many cases Europe-wide they are trying to block the successful nuclear cooperation between Hungary and Russia by political means and illegal decisions,”
he noted. The parties managed to agree on how to amend the contracts on the construction and financing, and lawyers are already adding the last touches to the legal formulation of the text.
“We trust that the European Commission has no intention of risking Hungary’s long-term energy supply security, since the construction of the new blocks in Paks can guarantee in the long run that Hungary’s energy supply is secure and that supplying Hungary with energy can take place in a sustainable manner and at a reasonable price also going forward,”
Mr Szijjarto noted. The minister called it good news that monitoring tests of the so-called gap wall had been completed, and the results had been submitted to the Hungarian Atomic Energy Authority for review and forwarded to the management of the Paks power plant for study.
Finally, the minister disclosed that two extremely important planning tasks are progressing rapidly: one task concerns the removal of soil beneath the future block six, down to the groundwater level for the time being, while the other task concerns the future solidification of the soil.
“It must be accepted that cooperation with Russia is needed for the security of Hungary’s energy supply, and during today’s talks, we were able to conclude all the agreements that will continue to ensure the country’s energy security and keep Hungary’s energy supply secure in the coming period,”
Peter Szijjarto said in conclusion.