Concerning: will the Hungarian-Russian gas transport system fall apart?
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Arbitration rulings against Gazprom are slowly taking shape, and according to experts with insight into the sector, the Hungarian-Russian gas transport structure could change significantly in the near future. New routes and changes in cooperation may emerge, but Hungary’s security of supply is not at risk.
Portfolio spoke to several experts in the sector about the future of Russian gas in Europe and Hungary, who agreed that the decisions against Gazprom could bring significant changes to the gas market. However, they all emphasised that these changes will mainly affect the import structure, and Hungary’s gas supply will not be cut off.
The background
In 2022, after several European companies refused to pay Gazprom in roubles, the Russian company halted deliveries to many of its buyers. Following this incident, the affected companies filed lawsuits, which are now on track to reach verdicts in arbitration courts. The companies’ combined claims for damages could potentially reach up to EUR 70-80 billion.
However, as Portfolio points out, this fine is so large that it is highly unlikely Gazprom will be willing or able to pay. For this reason, bailiffs have been appointed to collect compensation from any money transfers that the remaining EU buyers of Russian gas make to Gazprom. These countries include Hungary, Slovakia, and Austria, where state gas companies have already received calls from Orlen at the end of May to seize a certain percentage of transactions with the Russian state-owned company.
If the payments are successfully diverted, Gazprom will probably cut off gas supplies to the affected states immediately. If they are not, the damages will remain unpaid.
To ensure the continued import of gas, at the end of May, Hungary issued a government decree prohibiting any outside third party from seizing money from transfers initiated to Gazprom, arguing that it would be an interference in the state’s internal affairs. Although the government decree is questionable from an international legal perspective, it seems effective in the short term, as a transfer to Gazprom was completed without intrusion after its enactment.
However, this solution only provides short-term protection, both because of its international legal challengeability and because EU bailiffs may soon switch to a higher level of enforcement.
Russian gas will not stop but may reach Hungary via other routes
According to an expert interviewed by Portfolio, there is a high likelihood that
If our supply is not at risk, as the article states, it’s all good.
The rest is petty politicking.
Hungary will exit NATO and even EU before it gives up its gas and oil he gets from Russia. This is one of the reasons it’s ruling party is in power. Millions of senior citizens will vote for them as long as the Russian goodies flow. After all who wants to freeze in the winter? Right? And if Hungary exits NATO it can join Russia and Belarus etc! Surely there are some benefits there if you don’t mind dictators!