Hungary looks to SEE for Azeri gas supply - minister

The countries will run a joint market test in the coming months, after Hungary arrived at a political agreement with Azerbaijan to receive 100 billion cubic metres (bcm) of natural gas this year, Szijjarto said at the Budapest LNG Summit on Monday. An agreement to enable joint efforts will be signed later this month, he added.

Szijjarto also said that Hungary is looking at a long-term contract to receive 2 bcm of natural gas per year from Azerbaijan, with pipelines in Southeast Europe key to transiting these deliveries.

"Therefore, we are pushing for the development of infrastructure in this region, because this is the only solution," Szijjarto noted, adding that an issue will be to secure financing for such projects, with the EU being reticent to invest further in pipeline construction.

Hungary has the necessary national infrastructure which is ready to receive LNG deliveries via the import terminal at the Croatian island of Krk, according to Szijjarto. However, the Croatian-Hungarian interconnector is capable of delivering 1.75 bcm in the direction of Hungary, which means that the country would be unable to take advantage of the planned increased capacity of the Krk terminal to 6 bcm unless Croatia raises the outgoing transmission capacity at its end.

In addition, the planned increase to 5 bcm from 3 bcm of the capacity of the Greece-Bulgaria interconnector (IGB) is also crucial for Hungary's and Central Europe's energy diversification. The IGB will provide Hungary with an opportunity to import liquefied natural gas (LNG) from the terminals in Greece and Turkey, Szijjarto added.

The increase in IGB's capacity is dependent on Greek transmission system operator DESFA constructing two new compressor stations, IGB executive officer Teodora Georgieva has said.

Last year, the European Commission and Azerbaijan agreed to explore ways to expand the supply of Azeri natural gas to Europe, raising it from 8 bcm in 2022 to 12 bcm in 2023 and reaching 20 bcm a few years later.