Rare good news on the energy front

HUNGARY - In Brief 31 Aug 2022 by Istvan Racz

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Foreign minister Szíjjártó announced today a new bilateral agreement with Russia on the shipment by the latter of up to 5.8 million cubic meter of natural gas daily throughout September and October, after the shipments of 2.6 million cms per day over the bigger part of August. Hungary used up 11.2 bcm of gas in 2021, and the country has a long-term agreement on annual purchases of 4.5 bcm of gas from Russia, of which 3.5 bcm is agreed to arrive through Turkstream from the southern direction, and 1 bcm should arrive through the now troubled Nordstream 1 pipeline from the north-western direction. As Nordstream has not been functioning well lately, apparently for political reasons, Hungary has been receiving less than the expected amounts of the smaller part under its main gas shipment agreement with Russia.  The newly agreed shipments are over and above the amounts bought under the main agreement, and they are set to arrive through Turkstream, where shipments have continued recently without technical or political problems. We expect Hungary to consume some 10-10.2 bcm of gas this year, so the additional amounts from Russia from August to October could cover about 4-5% of its annual gas consumption. By the way, Hungary has in store some 4 bcm of natural gas, of which some is owned by Serbia. This morning, Mr. Szíjjártó said that Hungary's own gas in storage is currently at 36.5% of annual consumption, against an average 21.4% for the whole of the EU. Hungary, which is pretty much an average country within the EU as regards its usual weather conditions, typically uses up some 40% of its annual consumption during winter (from December to February), so it is actually quite c...