Gazprom-friendly Hungary blames EU for failing to end Russian gas dependence

Hungary's energy security chief on Wednesday (18 September) slammed the European Union for not providing enough support to help smaller, landlocked countries move away from Russian natural gas.

Csaba Marosvari, Hungary's deputy state secretary for energy security, told attendees at the Gastech conference in Houston that smaller, landlocked states, including Hungary, need more funding to cut reliance on Russian gas.

Around two-thirds of Hungary's gas imports come from Russia, but pressure is mounting for the country along with some of its neighbors to diversify more quickly away from Russian energy, following Moscow's 2022 invasion of Ukraine.

"In our region there are small countries, small markets, few significant market players, lack of capital, these kinds of infrastructure and de-bottlenecking projects can cost up to hundreds of millions of euros - in fuel market terms it is not feasible to fulfill," Marosvari said.

The European Commission's move toward financing green energy projects to end reliance on fossil fuels has left some countries out of the mix, according to Marosvari.

"As a result of the war in Ukraine, we received stronger and stronger pressure to diversify faster away from Russian fuels, but they deny the funds to be able to do that," he added.

Hungary has been receiving 4.5 billion cubic metres (bcm) of gas per year from Russia under a 15-year deal with Gazprom signed in 2021.

After the Russian invasion of Ukraine of February 2022, unlike other EU countries, Hungary was fast to bend to Moscow’s demands to pay gas in roubles.

Breaking ranks with EU, Hungary ready to pay for Russian gas in roubles

Hungary said on Wednesday (6 April) it was prepared to pay roubles for Russian gas, breaking ranks with the European Union which has sought a united front in opposing Moscow's demand for payment in the currency.

Hungary will pay for shipments …

Data from the EU Commission show that since the start of Russia’s invasion of Ukraine, the EU has drastically reduced its imports of Russian gas from more than 50% to 15% last year. This however doesn’t apply to Hungary which hasn’t reduced its gas imports from Russia.

In addition to supplies via the more direct pipeline via Ukraine, Hungary receives Russian gas via TurkStream, a pipeline running under the Black Sea to the European territory of Turkey and from there to Bulgaria and Serbia. Bulgaria doesn't receive any gas from TurkStream and relies on alternative supplies, but according to a contract it continues to ensure the transit to Serbia, Hungary and Austria.

Bulgaria to become main route for Russian gas imports to EU, Ukraine in 2025

With the expected end of Russian gas transit through Ukraine at the end of this year, the Balkan Stream gas pipeline through Bulgaria will become the main supply route for the EU and Ukraine, as discussed during the visit of the EU’s top energy official, Ditte Juul Jorgensen, to the dispatch centre of state-owned gas company Bulgartransgaz (BTG).

Marosvari said Hungary has signed some short-term liquefied natural gas (LNG) deals with Azerbaijan and Turkey to help cut its dependence on Russian sources. It also expects Turkey and Greece to become more significant suppliers of pipeline gas and LNG in the future.

"You don't put all your eggs in one basket, this is true of natural gas supply as well," Marosvari said.

“The Russians are delivering according to the contracts, for us they are reliable but this does not mean we have to stick to one single source, so we have been conducting a diversification strategy for supply.”

(Edited by Georgi Gotev)