Historic: Hungary signs longest-ever LNG supply contract with French energy giant

Hungary has signed the longest-term liquefied natural gas (LNG) purchase agreement in its history with French energy company ENGIE, which will serve as a key pillar of the country’s future energy security, Minister of Foreign Affairs and Trade Péter Szijjártó announced in Budapest on Thursday.

According to the ministry’s statement, following the signing of a sales and purchase agreement between MVM CEEnergy and ENGIE Energy Marketing Singapore, the minister reported that Hungary will buy 400 million cubic meters of LNG annually from 2028 to 2038, totalling 4 billion cubic meters over the contract period.

In his speech, he emphasised that this is the longest-term agreement Hungary has ever concluded for LNG supplies and underlined its significance as a cornerstone of the country’s energy security in the coming years.
“This is an important milestone for Hungary, as our network of reliable partners has expanded once again (…) We are pleased that from now on ENGIE will be among the guarantors of Hungary’s energy security, and we are naturally ready to further expand this partnership, which is already based on long-standing cooperation,” he said.

Szijjártó pointed out that humanity is now living in an era of crises, when global conflicts often cause supply difficulties or even emergencies in the energy sector.
“In recent years, we have witnessed dramatic price increases on energy markets that defied common sense. Transport routes that had operated reliably for decades fell victim to political conflicts, and the biggest problem of all is that the issue of energy supply has become completely politicised and ideologised,” he said.

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He explained that energy supply is essentially a physical and geographical issue: energy resources can only be purchased from where pipelines lead, as Hungary has no coastline.

“We are dependent on our neighbours and also on our neighbours’ neighbours when it comes to the safe energy supply of our country. Over the past years, we have done everything possible. We invested hundreds of millions of euros in Hungary, thanks to which our natural gas transmission network is now connected to six of our seven neighbouring countries. Within reasonable limits, we have done everything we could to achieve diversification,” he stated.

He noted that the Hungarian government understands diversification as purchasing energy from as many sources and through as many routes as possible, not replacing existing, well-functioning supply connections. “By diversification, we do not mean opening one route while closing another. That is not diversification – that is something entirely different,” he added.

Finally, the minister stressed that energy security is an issue of sovereignty, which is why every related decision falls under national competence, and each state must be free to decide for itself.

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“Unfortunately, this principle has been severely attacked in recent times. However, we insist that we ourselves make the necessary decisions regarding our energy security, and therefore we will not accept any kind of pressure, coercion, or war premiums in this matter,” he concluded.