Hungary to curb gas flows to Ukraine until Druzhba oil flows resume

  • Budapest and Bratislava blame Kyiv for Druzhba pipeline outage
  • Ukraine says Russian drone damage caused outage, repairs ongoing

Hungary will gradually stop sending natural gas to Ukraine until crude oil flows through the Druzhba pipeline resume, Prime Minister Viktor Orban said on Wednesday, escalating a standoff with Kyiv over energy supplies disrupted by the Ukraine war.

Hungary and Slovakia, whose leaders are outliers in the EU for maintaining relations with Moscow, blame Kyiv for an outage on the Druzhba oil pipeline that supplies their refineries with Russian crude pumped through Ukraine.

Kyiv says the pipeline was damaged by a Russian drone attack in late January and it is fixing it as fast as it can.

"We are gradually halting gas deliveries from Hungary to Ukraine, and will store the gas that remains with us in Hungary," Orban said in a video posted on Facebook.

GAS IMPORTS CONTINUING FOR NOW, UKRAINE SAYS. According to data on Hungarian pipeline operator FGSZ's website, gas shipments were continuing to Ukraine on Wednesday morning.

"As of now, this import has not been stopped," Heorhii Tykhy, spokesperson for Ukraine's ministry of foreign affairs, told journalists.

"If Prime Minister Orban still decides to stop it, we believe that the only consequence will be to deprive the Hungarian economy and the Hungarians of more than $1 billion, which Hungary received for example last year," Tykhy said.

Data from Ukraine's gas transmission system operator shows that Ukraine will receive 8.3 MMm3 of gas from Hungary on Wednesday, the same volume as on Tuesday.

Ukraine plans to import a total of 25 MMm3 of gas from Eastern Europe on Wednesday.

For Thursday, 4.6 MMm3 of gas were nominated for supply to Ukraine from Hungary as of 4.12 pm Kyiv time, the operator said. The operator regularly publishes data on companies’ applications for gas transit to Ukraine, updating them as they are received.

ORBAN UP FOR RE-ELECTION NEXT MONTH. For March, Ukraine contracted 180 MMm3 of gas from Hungary, or 28% of its total, an industry source earlier this month, slightly less than in February.

Ukraine's state energy company Naftogaz and Ukraine's energy ministry were not immediately available for comment.

Last week, European Union leaders failed to convince Orban, who is running for re-election next month, ​to lift his blockade on a €90 B ($104.36 B) EU loan to help Ukraine.

Orban also flagged earlier that Hungary could cut electricity exports to Ukraine if oil flows on Druzhba do not resume.

Last week EU experts arrived in Ukraine to assess the condition of the pipeline after Kyiv said it had accepted an EU offer of technical support and funding ​to restore oil flows,

However, Ukraine also signaled at the time that any resumption of crude deliveries to Hungary and Slovakia was still weeks away.

($1 = €0.8624)

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