FM: Energy market situation is “killing” Europe’s competitiveness

Minister Szijjártó said it had become clear last year that energy security in Europe had been “an illusion”.

Péter Szijjártó, Minister of Foreign Affairs and Trade, told a conference in Budapest on Monday that the current situation on the energy market is “killing” Europe’s competitiveness, adding that the only solution was to expand the natural gas sources available to the continent.

Addressing the 4th Budapest LNG Summit, Minister Szijjártó said it had become clear last year that energy security in Europe had been “an illusion”. According to a ministry statement, Minister Szijjártó argued that the war in Ukraine and the “failure” of the response measures to it had at one point resulted in a tenfold increase in the price of gas. Concerning the sabotage of the Nord Stream offshore pipeline, Minister Szijjártó said it was “insane” that there had been “no international, impartial, independent investigation” of the incident. “Imagine the same thing in America … imagine the reaction there,” he said. Meanwhile, Minister Szijjártó said there had been waves of “fake news” across Europe before the winter concerning high gas storage levels, pointing out that there had been little mention of storage levels relative to consumption. Minister Szijjártó said that though the past winter in Europe had been mild, experts were projecting the next heating season to be more difficult due to the loss of at least 50 billion cubic metres of Russian natural gas, the increased demand resulting from the reboot of the Chinese economy and limited European LNG capacities. The current situation is “killing” Europe’s competitiveness, he said, arguing that the price of natural gas on the continent was seven times as high as in the United States, while electricity cost three times as much as in China. Minister Szijjártó said the solution under the current circumstances was to focus on supply rather than demand, and import as much gas to Europe as possible. He said it was regrettable that the European Union had extended an earlier regulation cutting the use of natural gas by 15%, saying that in the summer, energy could only be saved by reducing industrial consumption. He reiterated that Hungary viewed energy security as a physical issue, rather than an ideological or political one, and considered diversification to mean procuring energy from as many resources as possible, not “changing the geographical direction” of energy dependence.

As regards new energy sources, the minister mentioned the import of gas from Azerbaijan as the number one option, noting that a political agreement had been reached on deliveries of around 100 cubic metres of Azeri gas to Hungary this year. Afterwards, annual deliveries could reach 2 billion cubic metres in the framework of a long-term contract, he added. This, he said, required infrastructure developments. The other option is to bring in LNG from Croatia, Greece, Turkey and Poland, he said, adding that this also demanded the expansion of network capacities, which required EU resources. Minister Szijjártó said that though some in Brussels did not want to continue financing the development of gas infrastructures, this would be a mistake because Europe needed to survive until new technologies were in place. Hungary’s government will continue fighting for infrastructure developments, otherwise, it would be “very very complicated” to ensure the energy security of countries like Hungary, he said.