Hungary Agrees on Option for More Russian Gas Shipments, Oil Transit Fees

(Reuters) — Hungary's foreign minister said on Tuesday that Russian energy giant Gazprom would maintain an option to supply additional gas to Hungary this year on top of the shipments agreed under a long-term deal.

Hungary's Prime Minister Viktor Orban has fostered good ties with Moscow over the past decade, and has avoided personal criticism of President Vladimir Putin despite condemning Russia's attack on Ukraine.

After talks with Russian Deputy Prime Minister Alexander Novak in Moscow, Hungarian Foreign Minister Peter Szijjarto also said on his Facebook page that Hungarian oil and gas group MOL will pay transit fees directly to the Ukrainian pipeline operator Ukrtransnafta for crude shipments it gets on the Druzhba pipeline.

Ukrtransnafta notified Russia's pipeline operator Transneft of its plans to raise the fee it charges for the transit of oil, sources told Reuters late last month.

Szijjarto has been visiting Moscow for talks since the outbreak of the war in neighboring Ukraine, despite criticism from both sides of the Atlantic.

Landlocked Hungary gets 80-85% of its gas from Russia, and Szijjarto said that last year about 80% of crude imports also arrived from Russia.

While countries in western Europe have made serious efforts to wean themselves off Russian gas, Hungary has been receiving 4.5 billion cubic meters (Bcm) of gas per year from Russia under a 15-year deal signed in 2021.

The gas transits mainly through the Turkstream pipeline, which allows Moscow to bypass Ukraine to carry Russian gas to southern Europe.

"Gazprom maintains the option that if we need it, for preparations for winter or filling up storages....we can buy additional gas on top of the amount set in the long-term deal," Szijjarto said.

Hungary and Russia have not disclosed the possible amount of extra gas which could be supplied by Moscow this year.

"Gazprom will consider the possibility of supplying extra contractual volumes of natural gas to Hungary in 2023 and applying a deferred payment for these supplies," Gazprom said in a statement.

Szijjarto said Novak reassured him that gas shipments on the Turkstream pipeline will come without disruptions. Turkstream will be stopped for maintenance from June 5 to 12, according to data posted earlier by Bulgarian gas transmission operator Bulgartransgaz.

Szijjarto also said that Russia's state-owned nuclear energy company Rosatom agreed to modify a contract, originally signed in 2014, to expand Hungary's Paks nuclear plant.

Rosatom was awarded the contract to build two 1.2 gigawatt VVER reactors, adding to the existing four reactors, without an international tender.

Szijjarto said construction and financing contracts on the long-delayed project would be modified and that the European Commission would also have to approve the changes. He did not give further details.

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