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Hungary signs new long-term gas supply deal with Russia

The deal, which was finalised at the end of August, was signed on Monday by Gazprom and Hungarian energy group MVM executives. Under the new agreement taking effect on 1 October, Gazprom will ship 4.5 billion cubic metres (bcm) of gas to Hungary annually, via two routes: 3.5 bcm via Serbia and 1 bcm via Austria.

The agreement is for 10+5 years, which means that after 10 years there is an option to modify purchased quantities. Péter Szijjártó, Hungarian Minister of Foreign Affairs and Trade said that the new price is much more favourable than the one Hungary used to pay under the deal that Hungary signed in 1995, which expires now.

The Hungarian Foreign Minister pointed out that gas consumption in the European Union amounted to 400 bcm last year, 48 per cent of this was supplied by Russia’s Gazprom. He underlined that the new long-term contract with Gazprom is a guarantee of Hungary’s secure and predictable energy supply.

Most of the shipments under the new contract will arrive via a new interconnector at the country’s Serbian border that will be operational by October.

“As of 1 October, Hungary will start receiving Gazprom’s gas via TurkStream and the gas pipelines of Southeastern Europe,” said Gazprom’s head Alexei Miller in a statement highlighting the efforts of Bulgarian, Serbian and Hungarian companies in charge of developing the national gas transmission systems.

Ukraine, which stands to lose millions in transit payments, issued a statement after the signing of the new agreement saying Hungary’s supply deal was a “purely political, economically unreasonable decision”. Ukraine will apply to the European Commission to assess the compliance of the new Hungarian-Russian gas agreement with the European energy acquis.

Hungary’s Foreign Minister Peter Szijjartó rejected the charge as Ukraine’s attempt to interfere in domestic affairs and underlined that Hungary won’t make a compromise on energy security.

“In Hungary, energy supply is a matter of security, sovereignty and economics, not a political issue,” highlighted the Minister. “You cannot heat homes with political statements.”

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