- Title: HUNGARY/FILE-GAS/ORBAN Hungary halts gas shipments to Ukraine.
- Date: 26th September 2014
- Summary: SIOFOK, HUNGARY (FILE, 2014) (REUTERS) VARIOUS OF CONTROL ROOM OF GAS PIPELINE OPERATOR COMPANY 'FGSZ'
- Embargoed: 11th October 2014 13:00
- Location: Hungary
- Country: Hungary
- Topics: General
- Reuters ID: LVA2SYMWW3U5A1DD4HUVWJ4VNOSD
- Story Text: Hungary has secured increased gas imports from Russia's Gazprom, Prime Minister Viktor Orban said on Friday (September 26), a day after Hungary's pipeline operator FGSZ stopped shipping gas to Ukraine.
Orban told public radio that he had held talks with Gazprom CEO Alexei Miller and the company had agreed to ship increased volumes of gas to boost levels at Hungary's storage facilities in the coming weeks.
Hungary is aiming to avert supply problems in the event of a potential halt in shipments of Russian gas stemming from the Ukraine crisis.
FGSZ on Thursday announced it had halted gas shipments to Ukraine indefinitely.
The move triggered a protest from Ukraine's Naftogaz, which urged its "Hungarian partners to respect their contractual obligations and EU legislation".
"Naftogaz calls on the EU to ensure a collective solution to the energy security of Europe and the respect of EU internal rules. Neither EU countries nor Ukraine should be put under political pressure through energy blackmail," Naftogaz said in a statement on its website.
European Commission spokeswoman Helen Kearns said: "The message from the Commission is very clear: We expect all member states to facilitate reverse flows as agreed by the European Council... There is nothing preventing EU companies to dispose freely of gas they have purchased from Gazprom and this includes selling this gas to customers both within the EU as well as to third countries such as Ukraine."
On Friday the EU aims to propose an interim solution to the gas row between Russia and Ukraine at talks it is brokering in Berlin to avert a winter gas supply crisis.
Timothy Ash, an analyst at Standard Bank, suggested that the Gazprom deal could be part of Moscow's strategy on Ukraine.
"Hungary also suspended reverse gas supplies to Ukraine last night. This comes after Gasonyazprom's CEO, Alexei Miller, met Orban on September 22, and reflects perhaps on Hungary's own 10 billion euro deal for an upgrading of its nuclear power facilities, significantly funded by Russia," Ash said in a note.
Michael LaBelle, an assistant professor at the Central European University in Budapest, said it made sense for Gazprom to store gas in Hungary and the move would also help Hungary in the event that supply is cut off.
Hungary is heavily reliant on Russian gas. Annual consumption is about 9 billion cubic metres (bcm), with most imported by pipeline from Ukraine. Hungary has domestic annual production of about 1.5 bcm.
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