On the eve of the EU's energy embargo against Russia, Hungary signed a ten-year gas supply agreement with Shell.

Hungary and Shell (SHEL.US) have reached a ten-year natural gas supply agreement, making it an important step for the country to reduce its dependence on Russian energy. As the deadline for the European Union's ban on Russian natural gas approaches, this action signifies Hungary's official launch of an energy supply diversification strategy. Peter Szijjarto, the Hungarian Minister of Foreign Affairs, stated in an interview during the Milan International Natural Gas Technology Exhibition that the country reached the aforementioned agreement on Tuesday: starting from 2026, they will receive 2 billion cubic meters of natural gas over the next ten years through the agreement. He added that this batch of natural gas will be transported to Hungary through pipelines in the Czech Republic and Germany. Although the EU plans to completely stop importing Russian fossil fuels by the end of 2027, Hungary has long publicly opposed this plan. Since the outbreak of the Russia-Ukraine conflict, Hungary has instead strengthened its energy cooperation with Russia. The Hungarian government has called on the EU to provide appropriate compensation for the efforts made by member states to diversify their energy supplies and reduce their dependence on cheap Russian energy. Now, Hungary has taken practical steps to find alternative sources of Russian natural gas. Szijjarto stated: "We are still negotiating multiple contracts with other Western suppliers, but we have not reached a stage where we can publicly announce them." However, he emphasized that the EU's current plan to "gradually stop importing Russian energy" continues to pose a significant threat to Hungary's energy security. The core reason is that Hungary currently lacks sufficient pipeline infrastructure to connect to other energy markets, which means they cannot guarantee sufficient natural gas transportation capacity. Currently, Hungary has a long-term gas supply contract with Gazprom PJSC, the Russian natural gas industry company, under which Russia supplies 4.5 billion cubic meters of natural gas to Hungary annually, with the agreement valid until 2036. Since 2022, Hungary has also increased its natural gas purchases from Russia based on this contract. Szijjarto pointed out that Hungary's nuclear energy development plan will fundamentally alleviate the country's energy supply pressure - by adding two nuclear reactors, Hungary's nuclear power capacity will double. This will not only reduce the country's current natural gas imports by half, but also help Hungary achieve 70% of its electricity demand through self-supply. "This will completely change our energy landscape," he said. "We hope to steadily progress with the relevant work and strive to connect these two new nuclear reactors to the grid in the first half of the next decade."