FM Péter Szijjártó: New long-term gas purchasing agreement signed with Gazprom

“A new, long-term gas purchasing agreement, which is able to guarantee the security of Hungary’s energy supply for fifteen years in this world that is full of uncertainties, has been concluded with Russian energy corporation Gazprom," FM Szijjártó said.

At the signing ceremony, Foreign Minister Szijjártó emphasized that in Central Europe the security of the energy supply has always been a strategic and national security issue of critical importance. “And natural gas plays an extremely important role in this, and this is not just a Hungarian or regional phenomenon, but an expressly European one," he added.

Szijjártó stressed that in 2020 the level of natural gas utilization in the European Union was 400 billion cubic meters, and according to authoritative opinions, the significance of this energy source will not be reduced in the foreseeable future. With relation to this, FM Szijjártó said that last year 48 percent of the EU’s natural gas usage originated from Gazprom, and shipments of natural gas from the company to Europe increased by 23 percent during the first seven months of this year, with Norwegian sources of natural gas in second place with a 23 percent share last year.

“In Hungary, the security of the energy supply is a national security, sovereignty and economic issue, not a political one. It is difficult to heat apartments, houses and family homes with political resolutions, but all the more so with gas, and the same is true for the operational capacity of industry”, he stated. “The reality is that in the absence of true, functioning alternatives, Hungary is currently able to guarantee its natural gas supply in the most secure and calculable manner within the framework of this long-term gas purchasing agreement with Gazprom," he underlined.

The agreement is valid for ten plus five years, making a total of fifteen years, but with an option to modify, and if necessary reduce, the quantity of natural gas purchased annually after ten years. The contract relates to the purchasing of an annual 4.5 billion cubic meters of natural gas. Gazprom will be transporting this volume to Hungary via two routes: 3.5 billion cubic meters from a southerly direction via the Serbian-Hungarian interconnector that will be put into commission on 1 October, and 1 billion cubic meters from the direction of Austria.

After providing the above details, the Minister of Foreign Affairs and Trade also told the press that the price included in the agreement is much more favorable than the price paid by the Hungarian party according to the currently expiring gas purchasing agreement, which was signed in 1995. As a result, he said he believes the achievements of the Hungarian utility cost cut may be preserved in the long term, enabling Hungarian consumers to continue to pay one of the lowest gas prices in Europe. “It is easy to make grand statements about diversification, but the situation is that although Hungary has ‘done its homework’, several other parties have not yet created the infrastructure conditions required to enable this," he stated.

It was announced in August that an agreement had been brokered with Gazprom with relation to the details of a new, long-term Hungarian-Russian natural gas purchasing agreement to replace the existing contract that will be expiring at the end of September.

In her speech at the ceremony, Deputy CEO of Gazprom Elena Viktorovna Burmistrova also welcomed the agreement, and primarily stressed the importance of natural gas. She pointed out that the use of this safe and accessible energy source is extremely important in the interests of achieving climate goals. She also touched on the subject of the diversification of transport routes, stressing that following six other European states, from 1 October natural gas will also be arriving in Hungary from a southern direction.