Hungary's gas importer and distributor MVM CEEnergy has signed a contract to import natural gas from Azerbaijan, as part of Budapest's efforts to secure alternative supplies ahead of a proposed European Union ban on imports from Russia. The agreement, announced by Hungary's Minister of Foreign Affairs and Trade, involves the import of 800 million cubic metres of natural gas from Azerbaijan between 2026 and 2027.

Supply Route and Contract Details

The gas will be sourced from Azerbaijan's major offshore fields in the Caspian Sea and delivered to the European market via the Southern Gas Corridor, a 3,500-kilometre pipeline network crossing Turkey to Greece and Bulgaria. Azerbaijan's state oil and gas company, Socar, will handle the delivery to MVM CEEnergy. This contract is a continuation of a trial deal signed by both companies in 2023, which arranged for the supply of 100 million cubic metres of gas in 2024.

Strategic Context and Market Dynamics

Socar has been actively seeking new gas supply contracts in Europe, a high-margin market, aiming to capitalize on the opportunity created by the EU's proposed proscription of Russian gas. This deal follows MVM Energy's trial LNG supply agreements earlier this year with France’s Engie and UK supermajor Shell.

Hungary's Dependence on Russian Gas and Opposition to EU Ban

Hungary currently imports over 8 billion cubic metres of gas annually, with about 7.5 billion cubic metres supplied last year by Russian giant Gazprom via the TurkStream pipeline across the Black Sea to Turkey and onward via Bulgaria. Budapest has repeatedly voiced its opposition to the EU's plan to fully halt Russian gas pipeline imports under long-term contracts by 1 November 2027 at the latest. Hungary, along with Slovakia, maintains close ties to Moscow and remains dependent on Russian gas imports. The Hungarian government has stated it plans to contest the ban in EU courts if the draft is approved by a majority of the bloc's members.