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Released September 16, 2020 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Hungary has signed its first ever gas deal with a Western energy company, having agreed to buy 250 million cubic metres of liquefied natural gas (LNG) per year for six years from Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, The Netherlands).
The deal was announced by Hungary's Foreign Minister Peter Szijjarto, who confirmed that the country's MVM Hungarian Electricity Works Zrt natural gas trading company had tied down an annual capacity of 1 billion cubic metres (Bcm) for the period 1 January 2021 to 1 October 2027 at the under-construction LNG regasification 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," he explained. "This means that 10% of Hungary's natural gas requirements will be met from the Krk LNG terminal until the end of 2027. 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."
The country wants to reduce its dependence on Russian gas imports. Szijjártó said that there were also a number of reasons for increasing the share of LNG in its mix. "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. 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."
In recent years, the government has completed a number of infrastructure projects to protect the supply of gas, with interconnectors in place to the gas networks of six out of seven of the country's neighbours. Szijjártó said "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."
Industrial Info is tracking all of the key projects associated with the construction of the LNG regasification terminal on Krk Island, Croatia. Supported by EU funding, the terminal will have an annual capacity of 2.6 Bcm, and it will be commissioned in January next year. The terminal will deliver gas to the Croatian national transmission network, which also is connected with neighbouring countries Slovenia, Italy and Hungary, as well as with other EU countries via non-EU Member States such as Serbia and Montenegro.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
The deal was announced by Hungary's Foreign Minister Peter Szijjarto, who confirmed that the country's MVM Hungarian Electricity Works Zrt natural gas trading company had tied down an annual capacity of 1 billion cubic metres (Bcm) for the period 1 January 2021 to 1 October 2027 at the under-construction LNG regasification 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," he explained. "This means that 10% of Hungary's natural gas requirements will be met from the Krk LNG terminal until the end of 2027. 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."
The country wants to reduce its dependence on Russian gas imports. Szijjártó said that there were also a number of reasons for increasing the share of LNG in its mix. "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. 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."
In recent years, the government has completed a number of infrastructure projects to protect the supply of gas, with interconnectors in place to the gas networks of six out of seven of the country's neighbours. Szijjártó said "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."
Industrial Info is tracking all of the key projects associated with the construction of the LNG regasification terminal on Krk Island, Croatia. Supported by EU funding, the terminal will have an annual capacity of 2.6 Bcm, and it will be commissioned in January next year. The terminal will deliver gas to the Croatian national transmission network, which also is connected with neighbouring countries Slovenia, Italy and Hungary, as well as with other EU countries via non-EU Member States such as Serbia and Montenegro.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
