Hungary's new gas deal with Turkey sparks concerns over Russian origins

Following the agreement reached in August last year between the Hungarian company MVM and the Turkish conglomerate BOTAŞ, the natural gas supply from Turkey to Hungary has started. However, in their analysis, experts from the Centre for Eastern Studies point out that some raw materials may originate from Russia.

The agreement between the BOTAŞ conglomerate and the Hungarian state energy company MVM concerns the sale of approximately 300 million cubic metres of natural gas. Its signing in August 2023 was the result of a visit to Hungary by the Turkish leader Recep Tayyip Erdoğan.

The Hungarian government stated that the agreement with Turkey would increase the country's energy security. It will also stabilize the prices of the blue fuel in the domestic market. Gas consumption in Hungary in the first half of 2023 fell by 18.2 percent compared to the same period the previous year. In numbers, consumption in the first six months of the year amounted to approximately 4.7 billion cubic metres.

Meanwhile, as OSW analysts write, there are doubts regarding the actual origin of the gas flowing from Turkey to Hungary. As we read, it cannot be ruled out that at least part of it is Russian gas.

"The current gas strategy of Ankara is based on acquiring fuel from various directions and increasing its own production, and later re-exporting part of the raw material as 'Turkish blend'. In the Union, this situation raises questions, whether such deliveries actually constitute a true diversification away from Russian supplies, and whether Ankara is, in effect, allowing Moscow to increase its exports to the EU market 'through the back door'. At the same time, Brussels has still not decided to impose any restrictions on the import of gas or LNG from Russia, and the noticeable sharp decrease in supplies from that country is primarily due to actions taken by Moscow itself," - emphasized in the analysis.

In December, a few months after signing the gas agreement, Hungarian Prime Minister Viktor Orban and President Erdogan signed a strategic partnership agreement in Budapest. - "Turks and Hungarians will win together in the 21st century," - said Orban during a joint press conference.