New energy deal: Hungary to store Serbia’s gas

Hungary and Serbia have reached an energy deal for ensuring both countries’ energy security which is more comprehensive and significant than any agreement signed hitherto, Foreign Minister Péter Szijjártó said in Belgrade on Friday.

At a joint press conference held with Serbian Finance Minister Sinisa Mali, Szijjártó noted “unbelievable global uncertainty”, with a world economy in the process of undergoing transformation and sanctions “shaking fundamental truths”.

A few years ago, no one would have expected the main point of contention in energy procurement talks would not be price but the very possibility of purchasing a sufficient quantity of energy, and no one expected energy supply security to be such a critical issue. In two contracts, Serbia has now entered an alliance which “guarantees secure and predictable energy supply to our countries under all circumstances,” he said.

In line with one of the contracts, Serbia will acquire gas via Hungary and will store in Hungary 500 million cubic metres of natural gas in the upcoming winter season,

he said.

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Hungary and Serbia already maintained excellent cooperation in the area of natural gas, with a significant portion of natural gas supplies for Hungary arriving from the south, through Serbia, including 1.7 billion cubic metres this year, he said. The new agreement will ensure that Serbia has undisturbed natural gas supplies in the upcoming winter season and, at the same time, “confirms Hungary’s role in the area of secure energy supplies for the region,” he added.

Starting from July 1, natural gas purchased by Serbia will be stored in Hungary and from October 1, it will be supplied in daily portions of 3-6 million cubic metres.

In line with the other contract, the two countries will interconnect their electricity markets. “Hungary will therefore join a Serbian-Slovenian initiative that creates a joint regional energy exchange,” he said.

It will increase the size of the market, which usually results in lower prices and “which is very important to all of us in the current extremely uncertain situation”, he added.

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Additionally, electricity transmission between the two countries will be faster and simpler, he said. The contract also includes increasing the capacity of the electricity cable linking the national networks, he added.

The current annual capacity of maximum 1,000 megawatts between the two countries will be increased by 500MW, with a new line to be built between Sándorfalva and Subotica (Szabadka) by the spring of 2028, he said.

“As a result, increased electricity capacities resulting from the Hungarian power market and ongoing investment projects in Serbia can also be utilised in each other’s interests,”

he said. Joint developments will be carried out in the field of renewable energy, and the contract also involves a considerable amount of Hungarian technology to be used in a nuclear power station development in Serbia, he said.

Szijjártó also held talks with Serbian President Aleksandar Vucic on issues affecting both countries, primarily concerning energy security and strategic partnership between the two countries.

Source: MTI