Hungary has successfully found a solution to facilitate payments for Russian gas shipments through the Turkstream pipeline from Bulgaria, avoiding potential violations of U.S. sanctions, as announced by the country’s foreign minister on Friday.
Key Highlights:
U.S. Sanctions Impact:
Following the U.S. sanctions imposed on Russia’s Gazprombank on November 21, European buyers faced challenges in making payments for Russian gas.
Previously, buyers utilized Gazprombank for currency conversion to roubles, a scheme established by Moscow in 2022.
Recent Developments:
Russian President Vladimir Putin recently issued a decree allowing buyers to convert their currency into roubles at banks not under sanctions, easing some payment restrictions.
Despite this, importers like Hungary, Turkey, and Slovakia have encountered difficulties and sought clarification on payment options.
Hungary’s Solution:
Hungary receives the majority of its Russian gas shipments—approximately 7 billion cubic meters this year—via the Turkstream pipeline.
After discussions in Sofia, Hungarian Foreign Minister Peter Szijjarto confirmed that a legal financial solution has been reached, accepted by Bulgarian partners, ensuring compliance with sanctions.
Szijjarto did not disclose specific details regarding the new payment mechanism but emphasized the security of gas transport through Bulgaria.
Ongoing Discussions:
Szijjarto also met with Russian Deputy Prime Minister Alexander Novak to explore future payment arrangements, although details from those talks were not disclosed.
Turkish Energy Minister Alparslan Bayraktar indicated that Turkey is seeking a waiver from the U.S. regarding payment regulations.
Market Reactions:
Benchmark EU gas prices at the Dutch TTF hub saw a decline, with the month-ahead contract dropping by 1.25 euros to 41.35 euros per megawatt hour (MWh) as of 1455 GMT.
Analysts from consultancy Energy Aspects noted potential risks to Russian gas supplies to Europe via Turkey due to U.S. sanctions but expect alternative solutions to emerge.