The Ukrainian authorities fear a complete stop of the transit of Russian gas to Hungary through the country after the signing of new contracts between Budapest and Gazprom.

This was stated by the general director of the company "Operator GTS of Ukraine" Sergei Makogon.

“Despite the contract until 2024, we expect a significant further reduction or complete halt of transit to Hungary through Ukraine,” Makogon wrote on his Facebook page.

The general director of the company said that the purpose of the new agreements between the Russian company and the Hungarian side was allegedly to bypass Ukraine.

Makogon also expressed the opinion that the launch of Nord Stream 2 would jeopardize the preservation of gas transit through Ukraine and the extension of the contract for it after 2024.

Contracts and reaction

On Monday, September 27, the press service of "Gazprom" announced the conclusion of two long-term contracts with the Hungarian MVM CEEnergy Ltd for the supply of gas until the end of 2036.

The agreements were signed in Budapest in the presence of Hungarian Foreign Minister Peter Siyjarto and Gazprom Deputy Chairman Elena Burmistrova.

The total volume of contracts is up to 4.5 billion cubic meters of gas per year.

Of these, 3.5 billion will come via the Balkan route, and another 1 billion - through Austria (in 2020, Hungary imported 8.6 billion cubic meters of gas from Russia).

The new agreements will enter into force on October 1, 2021 and provide for the possibility of changing the terms in ten years.

“The long-term contracts signed today guarantee reliable, stable supplies of Russian gas for the next 15 years.

An important component of the new agreements is the diversification of supply routes, ”emphasized the head of Gazprom, Alexei Miller.

“Starting from October 1, Hungary will start receiving gas from Gazprom through the Turkish Stream and gas pipelines in South-Eastern Europe.

This is largely made possible thanks to the efforts of Bulgarian, Serbian and Hungarian companies to develop national gas transmission systems, ”he added.

  • The ceremony of signing the gas supply agreement between Gazprom and Hungary

  • Facebook

  • © Szijjártó Péter

The signing of gas agreements between Russia and Hungary caused a negative reaction in Kiev.

Thus, the Ukrainian Foreign Ministry expressed disappointment with the decision of Budapest and called it "unfounded" and harmful to bilateral relations.

“We are surprised and disappointed by the decision of Hungary to sign a new long-term contract with the Russian concern Gazprom on September 27, 2021 in Budapest for the supply of gas bypassing Ukraine. We consider this an exclusively political, economically unjustified decision taken to please the Kremlin and to the detriment of the national interests of Ukraine and Ukrainian-Hungarian relations, which does not correspond to the principles of the Treaty on the Foundations of Good Neighborliness and Cooperation between Ukraine and the Hungarian Republic of December 6, 1991, " foreign policy department.

They expressed the opinion that it would be more profitable for Hungary to receive gas in transit through the territory of Ukraine, and said that they would appeal to the EU authorities because of the actions of the Hungarian side.

"The Ukrainian side will also apply to the European Commission regarding the provision of an assessment of the conformity of the new Hungarian-Russian gas agreement with European energy legislation," the Foreign Ministry said.

Against the background of these events, the department announced the postponement of the meeting of the Joint Intergovernmental Ukrainian-Hungarian Commission on Economic Cooperation, which was to be held on September 29-30 in Budapest.

“The Ukrainian Foreign Ministry initiated the postponement of the commission meeting to a later date, because the Hungarian-Russian gas agreement will have a significant impact on the energy security of Ukraine and Europe, creates new circumstances that require a comprehensive analysis of risks and threats, as well as concerted actions of the countries of the region in order to minimize its negative consequences, ”the message says.

The signing of a gas contract between Hungary and Gazprom bypassing Ukrainian territory is a blow to Kiev, Ukrainian Foreign Minister Dmitry Kuleba said on the air of the ICTV channel.

“This is a blow (to bilateral relations

. - RT

), and we will respond accordingly.

There should be no regret and no sympathy, ”he said.

In his opinion, a game is being played in Budapest, which is to simultaneously achieve progress in relations with both Ukraine and Russia: "But this game cannot last forever."

Aleksey Grivach, Deputy Director General for Gas Issues at the National Energy Security Fund, called Kiev's painful reaction to the new partnership between the Russian Federation and Hungary natural.

“Kiev is losing part of its income and because of this it is screaming and nervous.

But Hungary took such a step, because there is a more profitable and reliable option for delivering gas through the new infrastructure.

In addition, this was influenced by the fact that the Ukrainian side behaved inappropriately during negotiations on the gas issue, ”the expert said in an interview with RT.

At the same time, the Ukrainian side will not be able to tie this agreement to the issue of its "security" because of Nord Stream 2, since we are talking about supplies through the Turkish Stream and the infrastructure that was built in European countries, Grivach emphasized.

“In this case, the transportation of Russian gas will improve the gas network, develop it, and increase the availability of gas in the region.

This is a serious basis for the development of regional economic and energy security.

Ukraine will continue to express protests, but its screams are already bothering European addressees, ”the expert noted.

Transit issue

The Ukrainian side insists on maintaining the transit of Russian gas to Europe through its territory.

So, in July, the general director of the "Operator GTS of Ukraine" Makogon said that this allegedly guarantees the security of the country.

“Our main problem is actually ensuring the energy security of Ukraine.

Now transit guarantees us the availability of a resource on the territory of Ukraine, and it also guarantees us as a state and military security.

As long as we have transit, this ties the hands of our northern neighbor, since Ukraine is still one of the main transit countries for Russian gas to Europe, "he said on the air of the Ukraine 24 TV channel.

  • Ukrainian GTS

  • © REUTERS / Gleb Garanich

In particular, because of this, as well as because of the solid profit received for gas transit, Kiev opposed the implementation of the Nord Stream 2 project, experts say.

So, in early June, President of Ukraine Volodymyr Zelensky said that after the launch of the trans-Baltic gas pipeline, the country's budget will lose $ 3 billion a year received from gas transit.

Nord Stream 2 will disconnect Ukraine from gas supplies, which means it will disconnect us from at least $ 3 billion a year ... We will have nothing to pay for the Ukrainian army, ”Zelensky said.

As a reminder, on December 30, 2019, Gazprom and Naftogaz Ukrainy signed a contract for the transit of Russian gas until 2024. Moscow has repeatedly noted that they are considering this issue exclusively from the commercial side and are ready to continue transit through the Ukrainian territory if this is economically feasible, and also provided that the Ukrainian gas transportation system is in a normal state. In July, this was announced by the press secretary of the Russian President Dmitry Peskov. He explained that the volume of gas supplies through Ukraine will depend on the demand of consumers in Europe. In August, Vladimir Putin also confirmed Moscow's readiness to supply gas through Ukraine after 2024 - in volumes and for a period that will depend on the energy needs of the European Union.

Political scientist and economist Alexander Dudchak noted in a commentary to RT that by trying to present the new agreement between Hungary and Russia as economically disadvantageous and politically motivated, Kiev is demonstrating its acute dependence on Russian transit.

“The role of the transit state is extremely important for Ukraine, because it has no other items of income.

However, Kiev could have other items of income, if the current Ukrainian government was guided by the interests of the state, and not by political and economic forces that are far beyond the borders of the country, ”the expert emphasized.

The analyst added that by concluding such a contract, Hungary is doing absolutely the right thing, because it is trying to protect itself from the unpredictable behavior of the Ukrainian authorities.

“Hungary is now guaranteeing itself lower gas prices, which do not depend on market fluctuations, and also acquires a reliable partner who will not come up with new rules of the game during the game itself, as the United States does.

At the same time, it is beneficial for Gazprom, because it will be able to guarantee itself stable work in the production and delivery of gas, ”the economist noted.

At the same time, the interlocutor of RT was skeptical about Kiev's intention to apply to the European Commission with the requirement to check contracts for compliance with EU energy legislation.

“This is ridiculous because a non-EU country begins to demand that the European Commission look into the agreement signed by other countries.

This is a deliberately losing position that portrays Ukrainian politicians in a bad light.

At the same time, Hungary gets another reason to continue to block Kiev's aspirations to join NATO and the EU, ”concluded Dudchak.