Hungary's MVM prepares to phase out Russian gas supplies if needed

Hungarian state-owned energy group MVM is preparing to gradually phase out Russian gas supplies if necessary. Its CEO, Károly Mátrai, told Reuters. He said the company would be able to supply the country with enough gas even if imports from Russia stopped, although this would likely push prices up.

The European Union agreed on Wednesday to gradually stop importing Russian gas by the end of 2027, ending its decades-long energy dependence on Moscow. It plans to end short-term pipeline gas supply contracts by June 2026.

Landlocked Hungary has objected to the move. It wants to challenge it at the Court of Justice of the EU.

MVM trades more than ten billion cubic metres of gas across Central Europe. It has a 40 to 45 per cent share of the Hungarian wholesale market. Mátrai said the company was negotiating with several other suppliers, but the CEO did not specify which ones.

"We believe... that we will be able to ensure gas supplies to Hungary without Russian gas," Mátrai said.

He added that even if Hungary's long-term gas purchase contract with Russia fell under the planned EU ban, MVM would probably have access to capacity at various liquefied natural gas (LNG) terminals in Europe and "there will probably be enough gas".

MVM has already secured one billion cubic metres of LNG a year at the Croatian terminal on the island of Krk. It has also signed contracts with Shell for around 200 million cubic metres a year from 2026 and with French company Engie for 400 million cubic metres.

However, Mátrai said the cost of transporting gas from LNG terminals to Hungary and Slovakia would push MVM's gas prices up in the future. The company currently imports 3.5 billion cubic metres of Russian gas through the TurkStream pipeline and buys Russian and other gas on the spot market.

The company needs to meet demand in Hungary, which amounts to around eight billion cubic metres a year, and also supplies Slovakia. MVM also operates in the Czech Republic, where it supplies only non-Russian gas, via Germany, according to Mátrai.