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“Orban is well aware that Gazprom is an unreliable partner.” Mikhail Krutikhin on the purchase of gas by Hungary from Qatar

May 24, 2023
in Daily News
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On May 23 , Hungarian Prime Minister Viktor Orban said the country was in talks to buy liquefied natural gas from Qatar to reduce dependence on Russia. According to him, the countries are still deciding this issue, and it will be possible to talk about the first deliveries no earlier than 2026. Orban stressed that half of Hungary's energy needs are covered by supplies from Russia under long-term contracts. And it is for the second half that she needs to find new partners.

It is noteworthy that Orban was one of the few who blocked the introduction of energy restrictions against Russia. When the issue of the ninth package of sanctions was being decided, Hungary opposed the introduction of a hard ceiling on gas prices supplied to the European Union from Russia. As a result, the countries abandoned this idea, but agreed on a single gas purchase in the event of a sharp depletion of reserves. In addition, Orban recently struck additional deals with Russia to boost natural gas supplies. However, Hungary found another supplier to have a back-up plan. This point of view was expressed by an expert on the oil and gas market Mikhail Krutikhin in a conversation with The Insider.

Orban is no fool and is well aware that Gazprom is an unreliable partner. The first gas supply line, which goes through Ukraine, can be interrupted at any moment, and then the supplies will not reach Hungary. There is also a long chain of Russian gas that goes through the Black Sea, all of Turkey, Bulgaria and reaches Hungary. But this is also an unreliable chain: Turkey can be a capricious transit country, and Bulgaria can interrupt the Balkan Stream because it does not use it itself. These routes for getting gas from Russia, which is notorious for its unreliability, could run out for Hungary without supplies from Russia.

Back in 2012, an expert assessment was carried out of the possible consequences of shutting down Russian gas in the winter. Then the experts came to the conclusion that if Russian gas supplies are cut off in February, then Hungary will not have enough 57% of what it needs at that moment. Therefore, it must enlist additional sources of gas. In particular, it can be received through European terminals, as in Croatia. And Hungary quite logically turns to other sources.

Qatar also takes gas from several sources and sells it to various companies. The country has both its own enterprises and foreign ones, from Total to Shell. They are involved in the expansion of LNG production capacity in Qatar and as a result have some of the production as their own. This product can also reach Europe. Yes, from Qatar, but through any receiving terminals, and then European traders will already distribute to European consumers. There is a market here and many suppliers, not necessarily Qatar.

Gas enters Europe via two routes: the Turkish Stream, on which Hungary and Serbia sit, and the Ukrainian route, where Transnistria is paying, it is unknown how it is. Another part from there goes to Italy, part to Slovakia, as far as I know. The Czech Republic has completely abandoned Russian gas and oil. There is still some receiving, but she is also preparing to give it up completely. I think that Europe will be able to completely do without Russian gas.

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