Hungary agrees 15-year gas deal with Gazprom

Hungarian Foreign Minister Peter Szijjarto has signed a 15-year gas supply agreement with Russian energy group Gazprom to take effect as soon as its existing deal expires in September.

Landlocked Hungary has diversified natural gas imports in recent years, opening cross-border interconnectors with most of its neighbours and securing gas deals, including one with Shell via an LNG port in Croatia.

Although the Shell deal was its first with a Western suplier, Hungary has relied on Russia for most of its natural gas imports via a pipeline through Ukraine. That will change with the inauguration of a new southern pipeline across the Balkans.

"From now on we have a new gas purchase route at our disposal ... Hungary will not be without natural gas," Szijjarto said in a video on his Facebook page, adding that a connection at the country's Serbian border will be operational by October.

Szijjarto did not specify the quantity Hungary would import under the new deal or the price, adding only that pricing would be "flexible" and companies in both countries will negotiate the details.

The foreign minister, who is in Saint Petersburg attending an energy summit, added that he had agreed in separate talks with Russia's state nuclear construction company Rosatom that work on Hungary's new nuclear plant at the central Hungarian Paks site will be accelerated from the autumn.

The Hungarian Atomic Energy Authority has until September to approve a licence application by Paks 2 Zrt, the state-owned company developing the plant, and Szijjarto said he expects Rosatom to be able to begin construction next year.

Hungary has often been criticised by Western partners for lining up its energy supply too closely with Russia. The Hungarian government has rejected such charges, saying it has pursued all options to diversify the country's energy mix.

Szijjarto said the government was already in talks with neighbouring countries to sell any excess electricity once the Paks 2 nuclear plant comes online in about a decade. (Reporting by Marton Dunai @mdunai Editing by David Goodman)

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