Hungary started to replace Russian gas and could go even further

Despite the Hungarian government’s stance on the importance of Russian raw materials, Hungary started to diversify its supply of natural gas. If Hungary wants to, it could be completely independent of Russian gas.

The Hungarian government campaigned tirelessly in the EU to get exemptions from the EU’s sanctions against Russia. It continues to do so with nuclear energy, but as G7 points out, the Hungarian economy started to use less and less Russian gas in 2022.

As the analysis of G7 argues, the diversification of gas supplies has been a desired goal for many years. Despite that, there has been little real progress in this area in recent years, either in Hungary or at the EU level.

Before Russia’s invasion of Ukraine, 71 percent of natural gas coming to Hungary came through Ukraine from Russia. This could form a basis for the Hungarian government’s narrative that Russian gas is irreplaceable.

However, this situation already started to change in the autumn of 2021. That was when a new long-term agreement with Russia came into force, in which the Hungarian side agreed to buy from Gazprom via Serbia instead of Ukraine. As G7 argues, this was more significant for the Ukrainians, who were thus deprived of the transit fee for the gas.

The Serbian route did not fully replace the Ukrainian, but it gave a kickstart for the diversification that became a must after Russia’s invasion of Ukraine. Previously, in case of disruption, Hungary supplied its needs from Slovak and Austrian pipelines, also partly with Russian gas.

• Read also: PM Orbán agrees to new sanctions against Russia in Brussels

Diversification begins with great force

“Last year, 1 billion cubic metres of gas arrived in Hungary from both Romania and Croatia, which is a significant increase compared to the previous year, meaning that a diversification of supply sources has already started in 2022,” said Gábor Szokodi, FGSZ Trade and Business Development Director at the conference of the Hungarian Energy Traders Association. This means that Hungary’s supply from previously underutilised gas routes more than doubled in 2022.

Experts who spoke to G7, said that Russian gas is clearly not coming from Croatia, while the gas imported from Romania might originate from Russia. But this is not necessarily the case there either, as Hungary’s neighbour has a “significant” amount of its own production.

Overall, according to the calculations of G7, in one year, Hungary replaced 10-15 percent of its Russian gas import with alternative sources. Moreover, experts say that Hungary achieved that by only using a “fraction of the capacity of the pipelines concerned”.

All this indicates that there is a very real chance to replace Russian gas, or at least to diversify the sources of supply in a meaningful way. But as G7 warns, the question remains whether there is “political and commercial will to do so”.

Read alsoHungary bought most Russian gas when prices peaked

Source: g7.hu