“A historic, long-term gas purchasing agreement has been concluded with Shell; the capacities required for regasification have been contracted, and accordingly all requirements for the marketing of liquid natural gas (LNG) from the LNG terminal in Krk, Croatia, have been met”, Minister of Foreign Affairs and Trade Péter Szijjártó announced at a press conference in Budapest on Friday.

The Minister told reporters that MVM Hungarian Electricity Works Zrt.’s natural gas trading company has tied down an annual capacity of one billion cubic metres for the period 1 January 2021 to 1 October 2027 at the LNG terminal in Krk, Croatia, which will begin operations next January. “One billion cubic metres of liquid natural gas will be arriving each year, which after regasification will be transported to Hungary via the Hungarian-Croatian natural gas pipeline. This means that ten percent of Hungary’s natural gas requirements will be met from the Krk LNG terminal until the end of 2027”, he stated.
Mr. Szijjártó explained that a long-term purchase contract has been concluded with Shell relating to the purchasing of 250 million cubic metres of natural gas a year. “This is the first long-term agreement with a Western energy company in Hungary’s history. The contract has been concluded at such a competitive price that will enable the protection of the results and achievements of Hungary’s state-ordered public utility charge cut”, he added.
“When we make a decision with relation to Hungary’s natural gas supply, we take into account two aspects: the security of shipping, and price. Partly because of the coronavirus pandemic, and partly because of the overproduction crisis that preceded it, the price of LNG has fallen below that of piped natural gas (PNG). For this reason, we have decided to increase the role of LNG in the country’s natural gas supply. There are two prerequisites to this: one is the contracting of capacities in the terminal to which the gas arrives, and that deals with the regasification of LNG, and the other is that a natural gas source must be purchased”, Mr. Szijjártó stated.
“Natural gas currently plays the most important role in Hungary’s energy supply, and accordingly the country’s natural gas supply is a critically important issue. In recent years, the government has completed the infrastructure projects and concluded the necessary agreements that today allow us to state that Hungary’s gas supply is assured in the long term”, the Minister told the press. “We have constructed the interconnectors with our neighbours, and the natural gas networks of six out of seven of the country’s neighbours are now connected to that of Hungary. Dependable relations based on trust have been developed with both eastern and western energy companies, and this cooperation will be maintained in future in view of the fact that it is in Hungary’s interests for natural gas to arrive in the country from as many sources and via as many routes as possible”, the Minister stated.
Shell’s Global Executive Vice President István Kapitány told reporters that the company is one of the pioneers of the liquid natural gas sector, with over 50 years of experience in the production, trade, storage and transport of LNG. “Natural gas is the cleanest fossil fuel, its use could help fulfil demand for increasing quantities of clean energy, replacing coal or other liquid fuels”, he added.

(MTI/Cabinet Office of the Prime Minister)