Another favour from Moscow, Hungary gets payment extension with Gazprom

The Hungarian state company MVM Group has agreed on a deferred payment with Gazprom for the winter period and has also decided to restructure its storage capacity and make energy improvements, including increasing the capacity of the Hungarian Gas Storage Ltd. The energy group said on Monday that it would increase the capacity of its storage facility at Zsana, produce 800 million cubic meters of cushion gas at the storage facility in Hajdúszoboszló and investigate the possibilities of storing carbon dioxide.

It was stressed that the deferred payment is aimed at optimising the company’s financing: the periodic inclusion of this option in the contract will increase the MVM group’s financing scope and liquidity security.

The statement stressed that, in times of energy uncertainty, Hungary’s security of supply is guaranteed by the long-term gas contract signed in September 2021 and the additional gas volumes provided by Gazprom since then.

The MVM group also said that the conversion would affect MFGT’s storage facility in Sasana, where the aim would be to increase storage capacity and expand compressor capacity, while at the MVM group’s storage facility in Hajdúszoboszló the company has decided to inject 800 million cubic metres of cushion gas. The longer-term goal is to use existing infrastructure elements to a large extent to implement alternative energy recovery, such as compressed air energy storage, and to generate electricity using the carbon-rich natural gas in the area.

In addition, MVM and MFGT are also jointly exploring the possibility of carbon dioxide storage at the Hajdúszoboszló storage facility following the extraction of the natural gas from the gas-fired power plant in order to mitigate the carbon dioxide production of the Mátra Power Plant and the future Tisza Gas-fired Power Plant, thus contributing significantly to Hungary’s climate policy goals.

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The low cost of the gas from the gas-fired power plant in Hajdúszoboszló, with a market value of around €1.5 billion or HUF 650 billion at today’s world market prices, could contribute to maintaining the reduction of the electricity bill and provide an opportunity for new energy security developments, the MVM group said.

Hungary’s current and future storage capacity, after the utilisation of the storage facility in Hajdúszoboszló for other purposes, is among the best in the European Union in terms of both consumption and cubic metres, and the measures taken to implement a complex energy approach do not jeopardise Hungary’s energy supply and energy security, the statement said.

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