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Hungary Heads to Bulgaria for LNG Supplies

Hungarian gas importer and distributor MVM CEEnergy has signed a memorandum of co-operation with Bulgaria’s Bulgargaz that calls for the two companies to work together in arranging the supply and trading of liquefied natural gas.

The document continues Hungary’s efforts to diversify its sources of supply, even though state-controlled MVM has a long-term purchase agreement with Russian gas giant Gazprom, with deliveries arranged on preferential terms.

The memorandum with Bulgargaz follows deals with Azerbaijan and Turkey to secure gas imports, and most recently, a plan to book capacity at the upcoming Gdansk LNG terminal in Poland.

Bulgaria’s state news agency, BTA, said the document was signed by Bulgargaz chief executive Denitsa Zlateva and MVM chief executive Laszlo Fritsch in Budapest. The ceremony was attended by Bulgarian President Rumen Radev and Hungarian Prime Minister Viktor Orban, underscoring its importance.

The memo said both companies will target central-eastern and south-eastern Europe. Gas for the venture will have to come from suppliers in countries that are not subject to international sanctions or other restrictions.

Speaking this week in Warsaw, European Energy Commissioner Kadri Simson again urged European importers to reduce Russian LNG volumes and aim to phase them out completely.

Two Russian companies — independent gas producer Novatek and state controlled Gazprom — are stepping up exports to Europe.

Novatek operates Yamal LNG project in West Siberia and a smaller scale export facility on the Russian coast of the Baltic Sea, known as Vysotsk LNG. Gazprom is ramping up production at a similar mid-sized plant on the Baltic Sea, known as Portovaya LNG.

Data from marine traffic websites suggested that some cargoes from Portovaya LNG have landed in Greece previously.

Greece is a prime candidate for supplying LNG cargoes to Bulgaria, as it expects its largest LNG import project, based on the Alexandroupolis floating storage and regasification unit, with annual import capacity of 5.5 billion cubic metres, to start operations in January 2024.

The Alexandroupolis FSRU was previously an LNG carrier named GasLog Chelsea, built in 2010.

The vessel, owned by Greek LNG carrier owner, operator and manager GasLog, arrived at a Keppel-operated shipyard in Singapore in February this year to fit the regasification equipment. The upgraded FSRU is expected to sail to Greece in November.

Bulgaria is connected to Greece by a legacy gas pipeline and a newer link, Interconnector Greece-Bulgaria, which recently moved forward in its intention to increase its transmission capacity.

Source : Upstream