HomeMediaLatest NewsHungary has agreed with Russia on additional gas supplies via Turkish Stream

Hungary has agreed with Russia on additional gas supplies via Turkish Stream

13 August 2022

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev commented to the Business FM radio station about a possible increase in Russian pipeline gas supplies to Hungary.

Filling storage facilities is the main goal, but nothing prevents Hungary from re-exporting gas to other countries, Alexey Belogoryev says:

- The need is most likely related primarily to the necessity to speed up gas injection into the Hungarian underground storage, since Hungary is far behind other EU countries in terms of speed and injection rates. Gazprom has the opportunity to increase supplies to the Hungarians through the Turkish Stream. In July, after the Nord Stream stopped for repairs, an additional volume of gas went through the Turkish Stream, amounting to 41-42 million cubic meters per day, but in the last couple of weeks, supplies have again decreased, and now about 35 million cubic meters are fluctuating. The prices under the Gazprom contract are still more profitable for the consumer, significantly more profitable than when buying on the spot market. Therefore, if these additional over-contract volumes are supplied at contract prices, that is, according to the same formula, I think that it will be much more profitable for Hungary than buying gas from other suppliers.

— Will Hungary technically be able to resell these volumes?

— Gazprom's contracts, as a rule, no longer have restrictions on re-export. Technically, this is also possible, since Hungary is connected to Austria, including the largest hub Baumgarten, directly to gas transmission networks, so it can send gas further to Central and Northern Europe. The primary goal is to fill its own storage, after all, the heating season will begin soon, so Hungary may need this gas itself.

- If you look at the prospects?

- It is unlikely that Gazprom will limit Hungary in terms of gas purchases, especially since the possibility of delivering this gas through the Turkish Stream remains, and in principle, it is possible to increase supplies through Ukraine under the current transit contract.

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