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Szijjarto: Agreement on changes to Paks upgrade contract reached

Hungary secures new energy supply deals with Russia

Hungary has reached new agreements with Russia that will guarantee the country's uninterrupted natural gas and oil supplies in the coming period, Peter Szijjarto, the minister of foreign affairs and trade, said in Moscow on Tuesday.

Szijjarto said that despite the reactions his visit to Moscow was likely to draw from “the international liberal mainstream” and the Hungarian opposition, cooperation with Russia would remain key for Hungary’s energy security as long as energy supply was a physical issue and not a political or ideological one.

Though Europe is “proud to have got through the winter”, a recent report by the International Energy Agency indicates that energy supply security will be critical in the next heating season, Szijjarto said after meeting Alexander Novak, Russia’s deputy prime minister in charge of energy matters, and Alexey Likhachev, Rosatom’s chief executive, according to a ministry statement.

The minister argued that there were no guarantees that the next winter would be as mild as the past one, adding that China’s energy needs were rising now that it had reopened its economy after the pandemic and that European LNG capacities were limited.

He said the uninterrupted supply of Russian gas to Hungary was crucial, welcoming the extension of the option for Hungary to increase, if need be, gas imports beyond the volume specified in the country’s long-term gas purchase agreements.

A second agreement extends Hungary’s option to defer payments of its gas over a 150 euro price threshold, irrespective of the current prices, he said. Though gas prices are well below that right now, “the past year has demonstrated that we have to be able to prepare for extreme situations, too,” he added.

Meanwhile, Szijjarto said Russia had assured him that the technology, knowledge and parts needed to operate the TurkStream pipeline were all in place despite the sanctions.

Szijjarto said some 80 percent of Hungary’s oil supply had been delivered via the Druzhba pipeline in 2022, adding that Hungary and Russia had agreed that the Russian supplier would continue delivering the oil to Hungary’s oil and gas company MOL via the Ukraine-Hungary border.

He said Russia in the past had proposed other solutions that would have made Hungary responsible for the deliveries via Ukraine, “but it is better to avoid this in the current situation”.

In order to maintain the oil deliveries via Ukraine, MOL will pay the transit fee directly to the operator of the Ukrainian pipeline network, Szijjarto said.

Agreement on changes to Paks upgrade contract reached

The two countries have agreed on changes to the construction and financing contract of the upgrade of the Paks nuclear power plant with a view to enabling the project’s continuation and completion, Szijjarto said.

The war in Ukraine and the responses to it have not made it any easy to make progress on the expansion of the Paks plant, Szijjarto said after talks with Alexey Likhachev, Rosatom’s chief executive, according to a ministry statement.

Though so far sanctions on nuclear energy have been prevented, “it is clear that throughout Europe, in many cases there are efforts to block successful nuclear cooperation between Hungary and Russia through political means and unlawful decisions”, the minister said.

Szijjarto said that regardless of the war and the sanctions, the Paks contract had to be modified because of the technical and technological changes seen in the nine years since it was signed.

“The sanctions have only added to this, so by modifying the contract Russia and Hungary had to find the legal framework that ensured that the nuclear plant can be built,” he said.

Hungary and Russia have also agreed on how the construction and financing contract would be changed, he added.

Once those amendments are finalised, they will be submitted to the European Commission for approval, Szijjarto said.

“We hope the European Commission doesn’t wish to put Hungary’s long-term energy supply at risk,” the minister said, adding that the Paks plant’s new blocks were critical to guaranteeing sustainable and affordable energy supply in the coming period.

Meanwhile, Szijjarto welcomed the completion of the diaphragm wall monitoring tests, adding that they have been submitted to the National Atomic Energy Authority (OAH) and the power plant’s leadership for review.

The minister also welcomed the progress being made in the planning of the sixth block’s construction.

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