“The construction of the Croatian liquid natural gas (LNG) terminal on the island of Krk is in Hungary’s interests”, Minister of Foreign Affairs and Trade Péter Szijjártó declared in Zagreb following talks with Croatian Minister of Environment and Energy Tomislav Ćorić.

Mr. Szijjártó told the press that energy supply remains a critical issue in Central Europe from the perspective of the long-term future in view of the fact that several uncertainty factors have arisen. “In particular the fact there is still no valid transit agreement between Russia and Ukraine from 2020”, he highlighted.

“Accordingly, the question arises: how can the Central European region’s secure gas supply be realised in the upcoming years? It is critically important to Hungary for new transport routes and gas sources to become accessible from a southerly direction”, the Minister underlined.

As he explained, perhaps one of the most viable and realistic scenarios if for Croatia to finally construct its liquid natural gas terminal, and for gas to be transported to Hungary from there. “Hungary has an interest in the success of this project, and accordingly the Government has decided to make a purchase offer for 25 plus one percent of the shares of the company that owns and operates the LNG terminal”, he highlighted.

“The Croatian partner is making the acceptance of the offer dependent on Hungarian company’s tying down capacities in the terminal”, he added. “This cannot currently be done at a competitive price; the price on offer is currently much higher that the price of the gas available to Hungary”, Mr. Szijjártó pointed out.

For this reason, the Minister proposed to his Croatian colleague that cooperation between the two countries’ energy markets should become tighter than ever before via the integration of the Hungarian and Croatian gas markets, thanks to which no gas shipment tariffs would have to be paid at the Hungarian-Croatian border and a larger gas market would come about with a higher consumer demand.

Mr. Szijjártó said that in his opinion this would make price negotiations with gas trading companies easier in view of the fact that such a gas market integration would lead to a uniform price within the region, which would also be a significant step forward within the field of energy supply security.

“The Croatian party is open to the idea”, he said, adding that in the interests of drawing up the details, the ministers had agreed on the setting up of a joint bilateral government working group. “The task of the working group will be to discuss issues relating to the potential integration of the Hungarian and Croatian gas networks, and their preparation for a government decision”, he stated.

“We also agreed to enter into negotiations with energy companies that could supply the LNG terminal with new sources, if the occasion arises”, he explained. “Companies and sources from Qatar, Algeria and the United States could all come into consideration”, he underlined.

(Ministry of Foreign Affairs and Trade/MTI)