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September 28, 2021updated 26 Oct 2021 10:59am

Gazprom signs 15-year gas supply deals with Hungary

The deal, which is being criticised by Ukraine, will lead to the supply of up to 4.5 billion cubic metres of gas per year.

By Archana Rani

Gazprom Export has signed two long-term gas supply contracts with Hungary’s natural gas sales company MVM CEEnergy amid soaring gas prices in Europe.

The two contracts, which will be effective for 15 years each, involves the supply of up to 4.5 billion cubic metres of gas per year in total to Hungary, bypassing Ukraine.

Gazprom management committee chairman Alexey Miller said the two long-term contracts will serve as a guarantee of reliable and stable Russian gas supplies over the next 15 years.

Miller added: “An important component of the new arrangements is the diversification of supply routes. As early as from October 1, Hungary will start receiving Gazprom’s gas via TurkStream and the gas pipelines of southeastern Europe.

“This was made possible to a large extent through the efforts of Bulgarian, Serbian and Hungarian companies in charge of developing the national gas transmission systems.”

Last year, Russia’s state-controlled energy giant supplied a total of 8.6 billion cubic meters of gas to Hungary, the second-highest annual supply volume in the MVM CEEnergy.

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The Hungarian-Russian gas deal has been criticised by Ukraine, which would lose millions in transit payments.

Commenting on the deal, the Ukraine Ministry of Foreign Affairs said in a statement: “We consider this to be a purely political, economically unreasonable decision taken in favour of the Kremlin and to the detriment of Ukraine’s national interests and Ukrainian-Hungarian relations, which does not comply with the principles of the Treaty of Good Neighborliness and Cooperation between Ukraine and Hungary of December 6, 1991.”

The ministry said that the Hungarian-Russian gas agreement will have significant impact on energy security of Ukraine and Europe. It would also create new circumstances that mandate a comprehensive analysis of risks and threats.

The government noted it would call on the European Commission to assess the gas agreement compliance with European energy legislation.

In response to the comments, Hungary Foreign Minister Peter Szijjarto summoned the Ukrainian ambassador.

Szijjarto said: “We regard it a violation of our sovereignty that Ukraine wants to block a secure gas supply for Hungary.”

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