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HomeOil & GasHungary inks deal with Romania to receive more gas from October

Hungary inks deal with Romania to receive more gas from October

Gas transmission capacity towards Hungary at the interconnection point Csanadpalota on the Romanian-Hungarian border will be increased to almost 2.5 billion cubic metres (bcm) from 1 October. The agreement comes at a critical time as Hungary is rushing to fill up its underground storage facilities before the start of the next heating season.

The transmission system operators of the two countries, Hungary’s FGSZ and Romania’s Transgaz signed an amendment to the interconnection agreement that will ensure an increased technical capacity for traders to import gas from Romania to Hungary.

According to the new agreement, the technical capacity at the Csanádpalota interconnection point from Romania to Hungary will be increased to 3,057,174 kWh/h from 1 October.

Hungary’s Minister of Foreign Affairs and Trade Péter Szijjartó and his Romanian counterpart, Bogdan Lucian Aurescu announced in July to step up the energy cooperation between the two countries by boosting the cross-border gas link at Csanádpalota.

The gas compressor station on the Hungaria-Romanian border was implemented in 2019, enabling the transportation of 1,75 bcm of gas to Hungary from Romania. The investment was an important milestone connecting the CEE region with gas from the South. The capacity of the interconnection point will be increased now by 700 million cubic metres (mcm) to 2.45 bcm per year.

“Interest in capacity at the point has been extremely strong since the start of July, with flows towards Hungary averaging near nameplate capacity at 48.9 GWh/d on 1 July-17 August,” writes Argus adding that last month’s capacity auctions for August were so competitive and went on for so long that they were eventually cancelled, and new rules were put in place for this month’s auctions for September capacity, which incorporated much larger price steps.

In July, the Hungarian minister said that this year more than 600 mcm of natural gas were delivered to Romania via the interconnector and more than 300 mcm of gas the other way around.

FGSZ submitted its application to amend its operating licence, which is necessary for the fulfilment of the agreement about the increased capacity. The decision is now pending the approval of the Hungarian Energy and Public Regulatory Authority.

Due to supply disruptions from the East, Hungary counts on the Southern route as a more reliable, stable and predictable direction of gas supplies and therefore works to strengthen these transport routes.

Hungary’s underground gas storage facilities are now at 60 per cent full, up until now approximately 3.68 bcm of gas have been injected into the storage facilities, which corresponds to 82 per cent of the annual residential consumption. However, this volume is still less than the year before and well below the figures from the previous two years. Additionally, although Hungary’s gas storage capacities amount to about 6.4 billion cubic meters altogether, neighbouring Serbia has contracted to store 500 million cubic meters of gas in Hungary.

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