Page 9 - FSUOGM Week 35 2021
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FSUOGM                               PIPELINES & TRANSPORT                                         FSUOGM





                                                                                                  Hungary's Minister of
                                                                                                  Foreign Affairs and
                                                                                                  Trade Peter Szijjaro
                                                                                                  (left) with Gazprom
                                                                                                  CEO Alexey Miller
                                                                                                  (right) have agreed on a
                                                                                                  long-term gas deal.























       Hungary and Russia reach long-



       term gas supply agreement





        RUSSIA           HUNGARY has worked out all details and issues  much better than the one in the delivery agree-
                         of a long-term gas delivery agreement with Rus-  ment expiring this year. This will allow keeping
       Hungary signed its last   sia that will replace one expiring in the autumn,  gas prices low, he added.
       long-term agreement   Minister of Foreign Affairs and Trade Peter   The government fixed utility prices, leading
       on gas deliveries from   Szijjaro announced on August 30 after meeting  to a 25% cut in electricity, gas and central heating
       Russia in 1995.   with Gazprom's CEO Alexey Miller.    prices for retail users just before the 2014 elec-
                           Hungary signed its last long-term agreement  tions, which helped Viktor Orban's government
                         on gas deliveries from Russia in 1995, which  secure a second landslide victory after sweeping
                         expired in 2016. This was extended on an annual  into power with a two-thirds majority in 2010.
                         basis.                               Energy prices are now some 30% below 2014
                           The agreement, to be signed at the end of Sep-  levels.
                         tember and coming into force from October 1,   Keeping utility prices low remains a top
                         will be in force for 10+5 years, with an option  priority for the government ahead of the 2022
                         to modify delivery volume after the tenth year.  elections.
                           Under the agreement, Hungary will buy   The new contract will replace the 9bcm
                         4.5bcm of gas a year from Gazprom, including  annual contract between Gazprom and the Rus-
                         3.5bcm delivered from the south, through Hun-  sian-Hungarian joint venture Panrusgaz, signed
                         gary’s interconnector with Serbia, and 1bcm via  in 1996. Under this contract, the main supplies
                         the pipeline running from Austria.   are transited through Ukraine, via Beregovo on
                           Construction on a gas pipeline linking the  the Ukrainian-Hungarian border, with the rest
                         Hungary-Serbia border to Hungary’s gas pipe-  via Baumgarten in Austria.
                         line network is set to be completed in October.   Gazprom delivered 8.6bcm of gas to Hungary
                         The pipeline will connect Hungary to the Turk-  in 2020, down from 10.5bcm in 2019. In the first
                         Stream pipeline.                     half of 2021, Gazprom's deliveries amounted to
                           Russia for long has advocated the com-  3.9bcm. Hungary's domestic gas consumption in
                         pletion of the interconnector between Hun-  2020 was 10.2bcm.
                         gary and Serbia, allowing Russia to bypass   Gazprom declined to comment on the rea-
                         Ukraine. Gas deliveries from Ukraine to  son for the volume reduction under the contract
                         Hungary were occasionally halted in recent  with Panrusgaz, as well as the pricing principle.
                         years due to the Russian-Ukrainian conflict  According to market participants, the pricing
                         on gas prices.                       will be based on the quotations of the CEGH
                           Szijjarto said the price the sides agreed on is  Baumgarten hub. ™



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