Budapest decided to stop receiving gas through the Ukrainian pipeline and chose to have it delivered through Austria and Serbia, the most loyal countries to the Kremlin.

Budapest decided to stop receiving gas through the Ukrainian pipeline and chose to have it delivered through Austria and Serbia, the most loyal countries to the Kremlin. Photo: shutterstock.

By Annie Cook

The new 15-year contract for Russian gas supplies to Hungary is a slap in the face to Ukraine and the EU. Budapest decided to stop receiving gas through the Ukrainian pipeline and chose to have it delivered through Austria and Serbia, the most loyal countries to the Kremlin.

“We are surprised and disappointed by Hungary’s decision to sign – in Budapest on 27 September 2021 – a new long-term contract with Russia’s Gazprom for gas supplies bypassing Ukraine. We consider this to be a purely political, economically unjustified decision, made in order to please the Kremlin and to the detriment of Ukraine’s national interests as well as Ukrainian-Hungarian relations. This decision is in violation of the Treaty on the Foundations of Good Neighbourly Relations and Cooperation between Ukraine and the Republic of Hungary of 6 December 1991,” the Ukrainian Foreign Ministry said in a statement on Monday.

According to Kiev, it would be more beneficial for Hungary to receive gas through Ukraine. As Hungary declared its intention to sign the contract, Kiev threatened to appeal to the EU on the issue. “Ukraine will also apply to the European Commission to assess the compatibility of the new Hungarian-Russian gas agreement with European energy legislation,” the statement read.

The Ukrainian authorities announced the postponement of the meeting of the Joint Inter-governmental Ukrainian-Hungarian Economic Cooperation Commission. “On 29-30 September, the fifth meeting of the Joint Inter-governmental Ukrainian-Hungarian Economic Cooperation Commission, co-chaired by the foreign ministers of both countries, was to be held in Budapest. (…) Today, Ukraine’s Ministry of Foreign Affairs motioned to postpone the meeting to a later date because the Hungarian-Russian gas agreement will have a significant impact on the energy security of Ukraine and Europe. It also creates new circumstances that require a comprehensive risk assessment, as well as countries of the region to make concerted efforts to minimize its negative consequences,” said Ukrainian officials.

On Monday, Gazprom CEO Alexei Miller arrived in Budapest. The parties signed a long-term contract for gas supply to the country. The new contract will enter into force on 1 October and remain valid for 15 years. Hungary will buy 4.5 billion cubic metres of gas per year. The raw material will be supplied via Serbia (Turkish Stream line – 3.5 bcm) and Austria (1 bcm). The terms of the agreement can be renegotiated after 10 years. In 2020, Hungarians imported 8.6 bcm of gas from Russia (against total consumption of 10.2 bcm); they bought more only 12 years ago.