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Gas Supply: Hungary Not Interested In Long-Term Deal With Russia

By Tamás Székely // 2015.02.19.

Hungary will receive gas supplies from Russia worth 3 billion euros in the course of the next four or five years, Prime Minister Viktor Orbán said. Business portal quoted Orbán as telling a roundtable that the government has “fended off” signing the next long-term agreement with Russia concerning gas supplies, but reached agreement that a total 3 billion euros, which Hungary owes to Russia under the current agreement, expiring this year, shall only be paid in proportion to the supplies received rather than in advance.

Those supplies, calculating with the current price of 260 dollars per 1,000 cubic metres, will be sufficient for about four or five years, Orbán said. He noted that oil prices, which influence the price of gas, are volatile, therefore the government is not interested in negotiating another long-term deal. The government will continue its efforts to establish as many links with European energy systems as possible, Orbán said, adding that the government could decide at its Wednesday meeting to go ahead with the construction of the Hungarian section of the South Stream pipeline, which could be instrumental in importing gas from Austria.

The gas under Hungary’s current contract with Russia which has not been used will be good for another 3-5 years under a political agreement reached between the Russian president and Hungary’s premier, according to which this untapped gas can be used in the upcoming period, the foreign ministry estimates. In an interview to public television, Péter Szijjártó, minister of foreign affairs and trade, said Hungary can use 22 billion cubic meters of gas that has not been tapped under the expiring contract with Russia from the start of 2016. Hungary will only pay for every amount tapped, he noted.

It is in Hungary’s interest that Gazprom should fill Hungary’s gas stores with a capacity of 7 billion cubic metres with as much volume of gas as possible. On the one hand this means revenues while on the other it increases energy security, he said, adding that the political will was there to achieve this, he said. Put to him that coinciding with the joint press conference of Vladimir Putin and Viktor Orbán was a Wall Street Journal interview with Maros Sefcovic, the European Union’s energy affairs commissioner, who said the EU should be drawn into Hungarian-Russian gas negotiations, Szijjártó said Hungary wished to fulfil all EU rules. Energy security in central Europe is at once a European issue and its responsibility.

The minister added that the EU should go beyond drawing attention to regulations and should take steps, too, to ensure that all countries, including Romania and Croatia, fulfil their EU obligations. He noted that Hungary cannot buy gas from those two countries because they have not completed the necessary investments, and this violates EU regulations. The EU should just as much preoccupy itself with compliance with the available infrastructure rules as with how certain contracts in the future meet EU laws, he said.

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