Gazprom inks gas supply agreement with Hungary
Russian energy company Gazprom said September 27 it had signed two long-term supply agreements to deliver natural gas to Hungary.
Contracts with Hungary’s MVM CEEnergy call for the delivery of 4.5mn m3/yr of natural gas over a 15-year period.
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“An important component of the new arrangements is the diversification of supply routes” Gazprom said. “As early as from October 1, Hungary will start receiving Gazprom's gas via TurkStream and the gas pipelines of southeastern Europe.”
Gazprom says that TurkStream is meant to send gas to Turkey and into the southern and southeastern European markets. The pipeline has a design capacity of 31.5bn m3/yr.
Gazprom said that, as of September 19, deliveries through TurkStream were at an all-time high.
Russia is one of the main suppliers of natural gas to the European market. That market, however, is buckling under supply-side pressures and the strains of exceptionally high commodity prices.
European natural gas prices are up nearly 300% so far this year. Tight supplies, warmer temperatures and inflation are the primary culprits behind escalating commodity prices in general.
Fatih Birol, the director of the International Energy Agency (IEA), said both conventional natural gas and LNG were at a premium given the myriad of industry pressures this year. Russia could do more to address the situation in Europe, however.
“Based on the available information, Russia is fulfilling its long-term contracts with European counterparts – but its exports to Europe are down from their 2019 level,” a statement from the IEA read. “The IEA believes that Russia could do more to increase gas availability to Europe and ensure storage is filled to adequate levels in preparation for the coming winter heating season.”