Hungary has concluded a significant framework agreement with Azerbaijan for the purchase of 800 million cubic meters of natural gas over a period of two years. Foreign Minister Péter Szijjártó announced on Thursday in Budapest that this agreement represents another very important step toward diversifying the country’s energy supply.
At a joint press conference with his Azerbaijani counterpart Jeyhun Bayramov, Péter Szijjártó reported that Hungarian energy company MVM and Azerbaijan’s SOCAR had signed another major framework agreement on the purchase of natural gas.
The agreement provides for the opportunity of purchasing 1.1 million cubic meters of natural gas from Azerbaijan per day over the next two years, which corresponds to a total volume of 800 million cubic meters over the entire term.
The Hungarian politician emphasized that this contract had been clarified and finalized in all respects and represented another very important step toward diversifying Hungary’s energy supply.
The Foreign Minister made it clear that this was a framework agreement enabling the supply of 800 million cubic meters of natural gas, with the specific implementation depending on the respective market conditions.
Minister Szijjártó took the opportunity to distinguish the Hungarian definition of diversification from the European concept: “For Hungary, diversification means wanting to purchase energy from as many sources and via as many routes as possible, while Brussels’ aim is to purchase energy via as few routes, from as few sources, and at as high a price as possible.”
The minister argued that cooperation with Baku strengthens Hungary’s energy security, while Brussels poses a risk because it wants to cut Hungary off from well-established, cheap, and reliable energy sources, which weakens Hungary’s energy security. “In contrast, Azerbaijan has enabled Hungary’s largest energy companies to become owners of Azerbaijan’s largest oil and gas fields. In doing so, Azerbaijan – unlike Brussels – is strengthening Hungary’s position on the international energy market,” he noted.
These ownership interests have fundamentally changed Hungary’s role in the international energy market, he explained.
In recent months, MVM has been able to operate on the market as the owner and seller of 800 million cubic meters of natural gas because it owns shares in one of Azerbaijan’s most important natural gas fields.
Similarly, MOL was able to act as the owner and seller of five million barrels of crude oil because it holds shares in a large oil field.
The agreements go beyond the existing holdings, as the parties have agreed that MVM and MOL may acquire further ownership positions in Azerbaijani oil and natural gas production.
Specifically, MOL is close to concluding an agreement on participation in the exploration and exploitation of a new, large onshore oil and gas field, and MVM is only a few days away from reaching an agreement on a major renewable energy project. Minister Szijjártó reiterated that the increase in MOL and MVM’s ownership role in Azerbaijan would further strengthen Hungary’s position in the international energy market.
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Via MTI, Featured image: Pixabay
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