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    Hungary's MVM Signs Gas Supply Deal with Shell (Update)


The deal for gas supplies arriving via Croatia's Krk LNG terminal marks the first Hungary has signed with a Western company.

by: Joe Murphy

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Hungary's MVM Signs Gas Supply Deal with Shell (Update)

(Rewrites lead, adds comment from Shell)

Hungary's state-owned power company MVM, through its local subsidiary MFGK Croatia, has signed a six-year contract with Anglo-Dutch Shell to buy LNG that will be regasified at the Krk import terminal.

Foreign minister Peter Szijjarto said on social media on September 4 that the deal was Hungary's first ever with a Western company. The country buys most of its imported gas from Russia's Gazprom.

Shell said it "looked forward to working with MFGK Croatia in the longer term. The new supply location will also enable Shell to strengthen other positions in the region in future.

Hungary will take 250mn m3/yr of gas from Shell for six years, the minister said, describing the contract as "a huge step in Hungary's energy diversification." MFGK Croatia has booked a total regasification capacity of 6.75bn m³ until the 2026/2027 gas year, or about 1bn m³/yr on average.

The 2.6bn m3/yr Krk terminal is due on stream in 2021, and is expected to serve as a source of supply for a number of countries in southeast Europe. Russian supplies to Hungary totalled 10.5bn m3 last year, up from 7.4bn m3 in 2018. Bucharest is currently seeking a more flexible long-term agreement for Russian volumes.