Hungary is heavily dependent on Russian gas supplies. A complete cessation of Russian gas supplies would put the country under enormous pressure. Hungary is therefore seeking to establish itself as a hub for the European gas market.
Hungary opposes EU Commission proposal
The EU Commission has presented a proposal to completely ban imports of Russian natural gas by 2028 at the latest. The ban would apply to new supply contracts from 2026 onwards.
Hungary cannot prevent the new regulations, but it can significantly complicate the entire process and legal conflicts, also with regard to the possible peace negotiations with Ukraine.
High dependence on Russian natural gas
Hungary’s annual gas consumption has fallen by around 10-15 per cent since the energy crisis and has remained largely stable at around 8.5 billion cubic metres per year. Around 5.5 billion cubic metres per year are imported from Russia, 2 billion come from domestic gas production, and the rest comes from Azerbaijan and as regasified LNG from the Croatian terminal Krk.
Although Hungary has reduced its share of Russian gas imports slightly since the energy crisis, Russia’s share of Hungary’s gas imports could still be 65-70 per cent in 2025. A large part of Russian supplies are based on the 15-year contract signed with Gazprom in 2021, which secures Hungary 4.5 billion cubic metres of Russian natural gas via the TurkStream pipeline.
Hungary was therefore not affected by the end of gas transit through Ukraine, as Russian supplies had already been diverted to the Balkan route. The Balkan route refers to the possible remaining connection routes for Russian natural gas via Bulgaria/Romania (Trans-Balkan Pipeline/BRUA Pipeline) and Bulgaria/Serbia (IBS Pipeline).
Large storage facilities and expansion of gas production
Hungary’s gas storage facilities are quite large compared to its total consumption, with a total capacity of around 68 TWh. The total capacity roughly corresponds to average winter demand, but cannot fully cover peak consumption on winter days.
Hungary’s domestic gas production amounted to around 2 billion cubic metres in 2024. Hungary wants to expand gas production, and a key project in this regard is the Kiskunhalas tight gas project, which aims to increase natural gas production with the help of fracking.
Plans to diversify natural gas supplies
The Neptun Deep gas field in the Romanian Black Sea is scheduled to come online in 2027. Reserves are estimated at 100 billion cubic metres, and Hungary intends to purchase significant quantities from this field.
In 2024, Hungary signed an agreement with Azerbaijan and acquired a 5% stake in the Azerbaijani Shah Deniz gas field. Annual production there is just under 30 billion cubic metres, which could correspond to a share of up to 1.5 billion cubic metres of natural gas for Hungary.
Opposition to EU targets
In addition, deliveries from the LNG terminals in Croatia (Krk) and Greece (Alexandroupolis) could be significantly expanded in the coming years. Various expansion plans are under discussion for the Krk terminal, which could more than double its current capacity of 2.6 billion cubic metres.
An expansion of the connection to gas flows from Austria (sources: Norway, Germany) would also be conceivable. At present, however, opposition to the EU targets prevails and the country continues to rely on special conditions from Russia.
Hungary estimates that it would incur additional costs of €1.5 billion per year for natural gas imports if Russian natural gas supplies were to be banned. Hungary is therefore currently positioning itself as a transshipment hub for natural gas, including Russian supplies.