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Russian Gazprom signing short-term gas exports contract to Hungary may benefit both sides

This contract accounts for one third of the gas volumes, contracted by Hungary, which exceed 6 billion cubic meters a year, deputy head of Moscow-based National Energy Security Fund says

© ITAR-TASS/Alexander Ryumin

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Russia ready to discuss alternatives to South Stream with EU — Putin

MOSCOW, February 18. /TASS/. Russian gas giant Gazprom may accede to an offer by Hungary to sign a short-term contract on Russian gas supplies to the country, extending the contract which expires in 2015, according to experts polled by TASS.

This contract accounts for one third of the gas volumes, contracted by Hungary, which exceed 6 billion cubic meters a year, Alexey Grivach, deputy head of Moscow-based National Energy Security Fund, said to TASS on Wednesday. He added that the remaining contracts expire in 2019.

According to the fund’s data, the gas producer is negotiating a new gas delivery point avoiding Ukraine, with its European consumers. In this respect, Gazprom may accede to a short-term contract with Hungary, Grivach said, adding that the deal is also beneficial for the company’s Hungarian partners. The current contract defines Austria’s Baumgarten hub as the delivery point.

Raiffeisenbank analyst Andrey Polishchuk agrees that Gazprom may accede to signing a short-term contract with Hungary, though a long-term contract is more profitable for the company.

"Of course, it’s more profitable for Gazprom to sign a long-term contract with firm "take or pay" terms, but it still can accede to signing a short-term contract in case the deal stipulates beneficial contract terms or gas supplies route," Polishchuk said.

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Oil & Gas Gazprom Hungary

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