Hungary could receive Qatari LNG supply within three years

LONDON (ICIS)–Hungarian companies and experts have started talks on importing natural gas and crude oil from Qatar, Hungary’s minister of foreign affairs and trade Peter Szijjarto said on 16 December.

This is following a political agreement reached on 15 December, allowing for negotiations to begin between Hungary’s state-owned MVM and QatarEnergy on the purchase of gas.

Hungary could get Qatari LNG supply delivered via the Croatian Krk terminal.

Szijjarto said that “infrastructure developments will be needed in order to bring large volumes of gas to Hungary via the southern and south-eastern European LNG terminals”.

“If Croatia expands the capacity of its LNG terminal as it has promised, there will be a realistic possibility for Hungary to receive gas from Qatar within about three years,” the minister said.

Krk’s capacity increased from 2.6bcm/year to 2.9bcm/year in April. Croatian prime minister Andrej Plenkovic said in June capacity will be further expanded to 6.1bcm/year but did not specify when this would take place.

Croatia also recently announced plans to construct a new LNG terminal in Omisalj , to complement the existing Krk terminal in ramping up supply to southern Germany via Slovenia and Austria.

HUNGARIAN SWAP

Hungary’s state-owned gas trader MFGK is one of the capacity holders at Krk and is one of the most active users of the terminal.

MFGK signed a six-year LNG supply contract with portfolio major Shell in 2020 for the equivalent of 250 million cubic metres (mcm) of gas, and the company also purchased cargoes on the spot market.

However, a swap deal between Hungary and Croatia meant all LNG volumes that MFGK brought to Krk remained in Croatia. In exchange, Hungary received Russian pipeline gas through Croatia’s long-term contract with Gazprom.