* Hungary to speed filling of gas storage facilities -Orban
* Gazprom to ship increased volumes in coming weeks -Orban
* Hungary stops shipping gas to Ukraine, cites higher
* Naftogaz calls on Hungary to respect contractual
By Krisztina Than
BUDAPEST, Sept 26 Hungary has secured increased
gas imports from Russia's Gazprom, Prime Minister
Viktor Orban said on Friday, a day after Hungary's pipeline
operator FGSZ stopped shipping gas to Ukraine.
Orban told public radio that he had held talks with Gazprom
CEO Alexei Miller and the company had agreed to ship increased
volumes of gas to boost levels at Hungary's storage facilities
in the coming weeks.
Hungary is aiming to avert supply problems in the event of a
potential halt in shipments of Russian gas stemming from the
FGSZ on Thursday announced it had halted gas shipments to
The move triggered a protest from Ukraine's Naftogaz, which
urged its "Hungarian partners to respect their contractual
obligations and EU legislation".
"Naftogaz calls on the EU to ensure a collective solution to
the energy security of Europe and the respect of EU internal
rules. Neither EU countries nor Ukraine should be put under
political pressure through energy blackmail," Naftogaz said in a
statement on its website.
European Commission spokeswoman Helen Kearns said: "The
message from the Commission is very clear: We expect all member
states to facilitate reverse flows as agreed by the European
Council... There is nothing preventing EU companies to dispose
freely of gas they have purchased from Gazprom and this includes
selling this gas to customers both within the EU as well as to
third countries such as Ukraine."
On Friday the EU aims to propose an interim solution to the
gas row between Russia and Ukraine at talks it is brokering in
Berlin to avert a winter gas supply crisis.
Timothy Ash, an analyst at Standard Bank, suggested that the
Gazprom deal could be part of Moscow's strategy on Ukraine.
"Hungary also suspended reverse gas supplies to Ukraine last
night. This comes after Gasonyazprom's CEO, Alexei Miller, met
Orban on September 22, and reflects perhaps on Hungary's own 10
billion euro deal for an upgrading of its nuclear power
facilities, significantly funded by Russia," Ash said in a note.
Michael LaBelle, an assistant professor at the Central
European University in Budapest, said it made sense for Gazprom
to store gas in Hungary and the move would also help Hungary in
the event that supply is cut off.
"With the crisis in Ukraine they (Russians) need to put it
somewhere else and Hungary has the under-utilised capacity and
it gets the Hungarian government out of the pickle," he said.
He noted that selling gas already stored in Hungary would
currently be unprofitable as it had been purchased at a higher
A government spokesman was not immediately available to
Hungary's state-owned energy group MVM last year bought the
local gas trading and storage units of Germany's E.ON
which gave the government control over gas imports from Russia.
During a gas crisis in January 2009 when Russian gas flows
via Ukraine were halted, Hungary had to impose restrictions on
some industrial gas users. Since then it has increased storage
capacity while annual consumption has declined.
RELIANT ON RUSSIA
Hungary is heavily reliant on Russian gas. Annual
consumption is about 9 billion cubic metres (bcm), with most
imported by pipeline from Ukraine. Hungary has domestic annual
production of about 1.5 bcm.
The central eastern European country has storage capacity of
about 6 bcm. Its storage tanks are currently a little more than
61 percent full, the lowest percentage in the European Union,
data from Gas Infrastructure Europe showed.
Orban said Hungary's storage would be boosted in the coming
weeks and that, regardless of the severity of the Ukraine
crisis, Hungary must avert a situation in which its people do
not get the energy they need.
"I had talks with the Russians, the leader of Gazprom, about
this, that we will need a large amount of gas in the coming
period to increase the stored volumes," he said. "And we will
get this large amount."
Orban did not indicate how much additional gas Hungary would
Erste Bank oil and gas sector analyst Tamas Pletser said
Hungary had Europe's fourth-largest gas storage facilities and
could avert serious supply disruptions even if flows via Ukraine
Hungary can also import gas via a pipeline from Austria.
(Additional reporting by Michael Kahn in Prague and Adrian
Croft in Brussels; editing by David Goodman and Jason Neely)