Hungarian energy group MVM and Russian gas giant Gazprom have signed a supplementary commercial contract ensuring the continued delivery of Russian gas at competitive prices, Hungarian Foreign Affairs and Trade Minister Peter Szijjarto announced on 10 October. The memorandum of understanding (MoU) on the potential increase in pipeline gas supply to Hungary was finalised during the International Gas Forum in Saint Petersburg.

Despite the EU pushing to eliminate Russian gas imports by 2027, Hungary has said it has no intention of giving up gas supplies from the country, arguing that doing so would increase costs and undermine its energy security. Hungarian Prime Minister Viktor Orban’s government is in a standoff with Brussels over its opposition to sanctions against Russia and aid to Ukraine.

Hungary has been receiving 4.5bn cubic metres (bcm) of Russian gas under a contract with Gazprom signed in 2021 that does not expire until 2036. Russian supplies accounted for almost half of Hungary’s overall gas imports last year. This year, shipments should reach 6.7 bcm,  Szijjarto said, up from the 4.5 bcm initially agreed, according to Reuters.

This deal comes amidst growing pressure from the European Parliament, where Hungary's increasing reliance on Russian energy was highlighted during debates on 9 October. Despite these criticisms, Szijjarto reiterated that securing affordable gas for Hungary would be physically impossible without ongoing imports from Russia, reinforcing the country's deepening energy ties to Moscow.

However, according to Nepszava, citing statistics from KSH and Eurostat as well as market pricing from the Dutch gas exchange, Hungary has consistently paid above-market prices for Russian gas since the 2021 agreement. This contradicts Szijjarto’s claims that Hungary receives Russian energy at competitive rates, which is one of the main arguments used by the Orbán government to justify its continued business ties with Russia following its full-scale invasion of Ukraine.

The visit to Russia marks Szijjarto's 11th trip to the country since the onset of the war. "For profit, not peace," US Ambassador David Pressman commented on X (formerly Twitter), alongside a photo from the gas forum. Pressman has repeatedly conveyed the US administration's concerns to the Orban government, urging it to reduce its dependence on Russian energy. Hungary remains the only EU member state to have increased its energy cooperation with Moscow since the conflict began.

Szijjarto's visit followed just a day after the EP debate, during which several MEPs, along with European Commission President Ursula von der Leyen, openly criticised Hungary as the only EU country to have expanded its reliance on Russian fossil fuels.

The MoU was signed on  October 10 at the St Petersburg International Gas Forum (SPIGF), attended by Szijjarto and Gazprom CEO Alexei Miller. According to Gazprom, they discussed gas supply and cooperation in the gas sector, and “the high importance of Russian gas supplies for Hungary’s energy security was mentioned”.

Hungary receives some of its Russian supply via the TurkStream pipeline and through Bulgaria and Serbia, reducing the supply risk posed by the looming expiry of Russia and Ukraine’s deal on Russian gas transit through Ukraine. Kyiv has repeatedly said it will not renew the agreement.

Ukraine flowed 13.7 bcm of Russian gas to the EU and Moldova in 2023. The countries most dependent on this transit route are Slovakia, Austria and Moldova, which took 3.2 bcm, 5.7 bcm and 2.0 bcm respectively last year.

The end of Russian gas flow through Ukraine will not harm Hungary thanks to the TurkStream pipeline, Szijarto said. He added that the pipeline could be used by other European countries to offset a disruption in flow through Ukraine.

"This alternative route may help not only Hungary, but other countries of Central Europe if they face a serious situation in case there is no transit via Ukraine," he said at SPIGF.

However, despite Szijarto’s claims, Rystad Energy warned in July that Hungary “would face large challenges in case of a complete halt of Russian gas flow through Ukraine”.

“Assuming Moldova is supplied via the south, capacity via the Trans-Balkan pipeline from Romania would be fully allocated, halting inflows from Romania. Furthermore, Austria would be unable to forward gas to Hungary, while Croatia won't have additional regasification capacity available before 2025,” the Norwegian consultancy explained. “Hungary would have to rely solely on increased gas flow through the TurkStream pipeline, whereby the Horgos entry point would be required to operate continuously at its maximum capacity of 9 bcm per year. Alternatively, if Austria could source sufficient LNG from Italy, Hungary could receive additional gas through reverse flows at the Mosonmagyarovar entry point from Austria.”