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Hungary hopes to buy 1-2 bcm of gas from Azerbaijan from 2023

Azerbaijan plays a crucial role in Hungary’s secure energy supply, said Péter Szijjártó (pictured above), Hungary’s Minister for Foreign Affairs and Trade in Baku. He emphasised that Hungary aims to connect its gas network to the Southern Gas Corridor.

“If Greece, Bulgaria and Romania carry out construction work according to the planned schedule, then from 2023 a new source of supply can appear in Hungary’s portfolio. Hungary is hoping to buy 1-2 billion cubic meters (bcm) of gas from Azerbaijan each year,” said Mr Szijjártó.

Once completed, the EU-supported Southern Gas Corridor project, aimed at bringing Azeri gas to Europe from the Caspian Sea is expected to contribute to the diversification of European energy supplies.

The Southern Gas Corridor’s main source of supply is the Shah Deniz field, located in the economic zone of Azerbaijan in the Caspian Sea. The construction of the 4.5 billion euros project kicked off in 2016 and commercial gas flows are being planned to start this October. The only remaining part is the Trans-Adriatic Pipeline (TAP) linking Greece, Albania and Italy with an offshore section, the readiness of which is 95 per cent.

Shah Deniz 2 is considered one of the main components of the Southern Gas Corridor and is expected to raise the overall Shah Deniz production by 16 bcm to 26 bcm. TAP’s initial capacity is 10 bcm from which 2 bcm has been earmarked for Greece and Bulgaria. The volumes will be delivered once TAP enters operation, and when the Greece-Bulgaria interconnector is completed, by the end of 2020.

The announcement comes after Hungary signed a trade agreement with Russia’s state-owned energy group Gazprom to purchase 4.2 bcm of natural gas for one year starting from this October. Hungary also counts on the opening of another new route from the South, through the Turkish Stream project that will carry Russian gas to Turkey and then to Europe, via Bulgaria, Serbia and Hungary. Upon completion, the pipeline could bring 6 billion cubic metres of natural gas to Hungary.

Gas consumption in Hungary amounts to 10 bcm according to data from the Hungarian Energy and Public Utility Regulatory Authority. For now, the country is fairly well connected to its neighbours in almost every direction, which increased transited gas volumes in recent years. When it comes to gas routes’ and sources’ diversification, Hungary considers several ongoing projects, apart from the mentioned TAP and Turkish Stream, Romanian offshore gas and the LNG through the Croatian Krk terminal are also on the table. The future directions of Hungary’s gas import mix will play a crucial role in the energy security of the wider Central and South-Eastern European region.

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