EU funds 30 January 2023, 4:53pm

Hungary signs seven agreements with Azerbaijan

MTI

Hungary has raised the level of cooperation with Azerbaijan to the status of a key strategic partnership, Prime Minister Viktor Orbán announced in Budapest on Monday. Seven Hungarian-Azerbaijani agreements were signed: on cooperation in natural gas, agriculture, space research, migration, among others, and finally a declaration on a key strategic partnership.

Viktor Orbán met Azeri President Ilham Aliyev on Monday, announcing at a joint press conference that under one of the agreements signed today they will double the amount of natural gas coming from Azerbaijan to Europe by 2027. Under another agreement Azerbaijan will supply electricity to Europe.

Orbán said that both natural gas and electricity coming from Azerbaijan pass through Hungary. He said that from now on, cooperation in the energy sector between Bulgarians, Romanians, Hungarians or Slovaks is not a regional but a pan-European issue, as they can supply the whole of Europe through these countries, and they expect the European Commission to support the necessary projects accordingly.

Aliyev said that energy security is now the top priority everywhere, adding that Azerbaijan has plenty of energy to meet European needs as a reliable supplier for the next 100 years.

Seven Hungarian-Azerbaijani agreements were signed: on cooperation in natural gas, agriculture, space research, migration, among others, and finally a declaration on a key strategic partnership.

Increased natural gas production in Azerbaijan could play an important role in the energy security of Hungary and Central Europe, but this requires the development of infrastructure in the region, which in turn requires EU support, Hungarian Foreign Minister Péter Szijjártó said last Tuesday. He added that it is in Hungary’s interest to be able to involve Azerbaijani resources in the supply as soon as possible.

Ge said at the time that new interconnectors must be built and transport capacities must be increased, and for this we also need EU funding and resources. Therefore, Hungary, together with Bulgaria, Romania and Slovakia, has appealed to the European Commission to prioritise the issue and to ask Brussels to support the developments needed to guarantee energy security in the region.

The minister also welcomed Azerbaijan’s ambition to double its pipeline capacity to Europe by 2027, and said it was an important task to create the necessary contractual and physical environment to bring gas from the Southern Gas Corridor to the central part of the continent.

The Hungarian Foreign Minister pointed out that political commitment has been made from both sides, and the Hungarian government hopes that Azerbaijani gas can contribute to the domestic security of supply as soon as possible, for which inter-company negotiations have already started.

As shown in the graph below, Azerbaijan currently accounts for around 3-4% of monthly EU gas imports, or around 8 billion cubic metres per year. The gas enters the EU via the Southern Gas Corridor (TANAP then TAP), partly to Italy. In order for Hungary to benefit from the increasing gas production in Azerbaijan, infrastructure improvements are indeed needed to eventually allow gas to reach Hungary via the Turkish Stream from Serbia.

It is worth noting that Hungary also has plans to import electricity from Azerbaijan, where major developments are still needed to ensure that "green electricity" will eventually arrive from thousands of kilometres away via a network of submarine and then onshore pipelines, although the project is also hampered by a number of geopolitical and infrastructural obstacles.

This is why the leaders of the countries involved in the project and European Commission President Ursula von der Leyen recently visited Bucharest to discuss the framework. So there is support from Brussels behind such projects, as Péter Szijjártó called for in his speech last Tuesday.