We will not give up on the gas purchase agreement with the Russians - Péter Szijjártó from St Petersburg

At the conference in St Petersburg, the Hungarian minister stressed, among other things, that Hungary needs cooperation with Russia in the field of energy supplies, and although the country is under pressure, it will not stop buying Russian gas, as it is satisfied with the current framework of cooperation.

As Portfolio reported yesterday, Hungarian state-owned Hungarian Electricity Works (MVM) has bought a 5% stake in the production-sharing agreement of the Azeri Shah Deniz gas field and a 4% stake in the gas sales company. This provides a significant annual gas production and supply opportunity of around 1.5 billion m³, which is also a significant step forward in the diversification of Hungarian gas imports. Earlier, Péter Szijjártó mentioned that an annual gas supply agreement of around 2 billion m³ could be concluded with the Azeris, which is almost half of the 4.5 bn m³ per year of the long-term gas purchase contract with Russia.

Partly for this reason, and also as a kind of reassurance, the Hungarian minister stressed to the Russians at the St Petersburg event that Hungary does not plan to stop buying gas from Russia, despite the recent agreement with Azerbaijan. He could also have been sending the message because the cabinet was trying to prevent the European enforcement against Gazprom from being enforced in Hungary through an important government decree last week, in the framework of the gas purchase contract concluded by the MVM's subsidiary.

In the context of the latter, Tamás Pletser, an oil and gas analyst at Erste, told Inforadio that billions of m³ of Russian gas deliveries are behind the European settlement disputes, and that these arbitration lawsuits could reach the enforcement stage in the coming weeks. Pletser said that

This poses a threat to Hungary and the MVM Group, as Hungary has a long-term gas contract with Gazprom, which is still in force and which is fully honoured by the Russians.

The big question, the analyst said, is to what extent a recent arbitration ruling can be extended to the existing amount of gas that Gazprom sells to its remaining European partners. For him, the threat seems very real and it will probably only be "in the next few weeks that we will find out whether the decision can really be enforced for this gas and the amount to be paid for it, as Russian Gazprom has in fact no other assets left to seize in Western Europe or the European Union".

Cover photo: Péter Szjjártó's Facebook profile