Hungarian energy group MVM prepares to phase out Russian gas if needed

By Krisztina Than and Gergely Szakacs

BUDAPEST, Dec 5 (Reuters) - Hungary's state-owned MVM group will be able to supply the country with enough gas even if imports from Russia are halted, although prices will likely rise, its chief executive told Reuters.

The European Union agreed on Wednesday to phase out Russian gas imports by late 2027 as part of an effort to end the bloc's decades-long energy dependency on Moscow, with short-term pipeline gas contracts affected from as soon as June 2026. Landlocked Hungary opposes the move, and said it would challenge the legislation at the EU's Court of Justice.

Karoly Matrai, CEO at MVM, which trades more than 10 billion cubic metres of gas in Central Europe and has a 40-45% share in the Hungarian wholesale market, said MVM was in talks with several other suppliers, although he did not name them. 

"We believe...that we will be able to supply Hungary with gas, even without Russian gas,"  Matrai said, adding that even if Hungary's long-term gas purchase contract with Russia falls under the planned EU prohibition, MVM would likely be able to access various LNG port capacities in Europe and "probably there will be enough gas".

DIVERSIFICATION PUSH

MVM has secured 1 billion cubic metres a year of LNG capacity at Croatia's Krk terminal and signed deals with Shell for around an annual 200 million cubic metres from 2026 and France's Engie for 400 mcm.

But Matrai said the cost of shipping gas from LNG ports to Hungary and Slovakia would add to prices in the future. Under a long-term Russian contract, MVM currently imports 3.5 bcm of Russian gas via the Turkstream pipeline, and buys Russian and other countries' gas on the spot market, to meet local demand of around 8 bcm a year and also to ship to Slovakia.

In the Czech Republic, MVM supplies clients from Germany entirely with non-Russian gas, Matrai said. He expects a Romanian regulatory decision on MVM's agreed acquisition of E.ON’s 68% stake in E.ON Energie Romania by April. 

"We are preparing for a negative decision and we will be very happy in case it turns out to be favourable," Matrai said.

The group is also building three gas-fired plants with a combined 1,590 MW capacity in Hungary, due online in 2029, and plans to invest 400-600 billion forints to extend the lifespan of Hungary's Paks 1 nuclear plant by 20 years beyond its 2032-2037 shutdown dates, he added.

(Reporting by Krisztina Than and Gergely Szakacs; Editing by Kirsten Donovan)