Hungary commits to Russia gas route as Poland looks to US

Bloomberg

Hungary sees a new pipeline for Russian gas as the “only realistic” step toward energy diversification now, Foreign Minister Peter Szijjarto said on the same day Poland used a visit by US President Donald Trump to announce plans to wean itself off fuel supplies from its Soviet-era master.
Hungary signed an agreement this week with Russian energy giant OAO Gazprom, which is building the Turkish Stream pipeline to carry gas to central Europe via Turkey, Bulgaria and Romania. With the first shipments expected by end-2019, the project offers an alternative to a pipeline that cuts through Ukraine, even if it won’t reduce Hungary’s reliance on Russia.
“The only realistic option for diversification is to link up with the southern gas corridor,” Szijjarto said in an interview in London. He said delays by Romania and Croatia to link their networks with Hungary was another reason for siding with the Gazprom project.
Hungary’s decision contrasts with Poland, an ally on most issues except Russia. Budapest sees Moscow as a partner, including on energy, while Warsaw views it as a threat. Poland, which has been dependent on Russian gas via links transiting through neighboring Ukraine and Belarus, will sign a long-term agreement with US companies “soon” to import liquefied natural gas, or LNG, President Andrzej Duda said at a briefing with Trump in Warsaw. That’s part of a plan for Poland to be able to forgo a new contract with Gazprom when an existing one expires in 2022.
Other countries are also diversifying. Trump welcomed Croatia’s plans for an LNG terminal on the Adriatic island of Krk, while Lithuania introduced an off-shore vessel to convert the fuel at its port in Klaipeda to replace the 2.7 billion cubic meters it was receiving from Russia every year.
Polish gas distributor Gaz-System called for the “full integration” of gas markets across central and eastern Europe via the expansion of north-south pipelines, after signing a cooperation agreement with Plinacro, Croatia’s transmissions system operator, in Warsaw. Hungary, for its part, has strengthened energy cooperation with Russia, signing a deal with state-owned Rosatom Corp. in 2014 to expand its sole nuclear power plant.