Report: Orban wins Russian gas pledge as courtship of Putin pays off

MOSCOW, Feb 18 (PRIME) -- Hungary will gain 3 billion euros under an agreement made with Russia on Tuesday, as earlier it had to pay this sum to Gazprom by the end of 2015, Prime Minister Viktor Orban told Bloomberg on Wednesday.

Orban struck a gas agreement with President Vladimir Putin after cultivating ties with the leadership in Moscow even as Russia grew increasingly isolated from most European Union nations.

Hungary is “relieved” that it will be able to roll over the unused portion of its 20-year supply deal with Russia, which it otherwise would have had to pay for when the contract expires in 2015, Orban told reporters Tuesday after meeting Putin. OAO Gazprom may boost the amount of gas it stores in Hungary, Putin said, adding that Russia also supports linking a new gas pipeline, which would circumvent Ukraine, with Hungary.

“Every question was settled according to the way our Hungarian friends wanted it,” Putin said.

Orban has often cited Hungary’s dependence on Russian energy in opposing stiffer sanctions over the Ukraine crisis as he sought to balance his nation’s economic interests with duties as a leader of an EU country. Orban held his second official meeting with Putin in a little more than a year, as the Russian leader’s visits with the 28-nation bloc’s officials became less frequent since pro-European Ukrainians ousted their Kremlin-backed leader last February.

Russian Isolation

Hungary has backed E.U. sanctions against Russia for the Kremlin’s alleged support of separatists in Ukraine, even as Orban criticized them amid warming ties with Putin.

“Isolating Russia isn’t sensible,” Orban said, adding at the same time that Hungary “wouldn’t divide Europe.” Russia and the EU need to continue engagement in order to come to a peaceful solution for Ukraine, Orban said.

Orban’s closer ties with Russia resulted in energy deals with Russia, which is the main source of gas for Hungary, supplying at least 60 percent of its consumption, according to the International Energy Agency data.

Under the latest accord, Hungary will be able to roll over 22 billion cubic meters of unused gas from its expiring contract with Moscow, enough to last three to five years, Foreign Minister Peter Szijjarto said on M1 state television. The details of the deal still need to be negotiated, Szijjarto said.

Gazprom, which has stored 700 million cubic meters of gas in Hungary, may boost this amount significantly, Szijjarto said, adding that Hungary has gas storage capacity of 7 billion cubic meters.

Energy Deals

Orban, who as recently as 2008 urged Hungary to avoid becoming the “happiest barrack of Gazprom,” has struck a different tone with Russia since he returned to power in 2010, after serving as prime minister from 1998 to 2002.

Last year, Orban agreed with Putin on a loan of about 10 billion euros (U.S. $11.4 billion) to expand Hungary’s nuclear power plant. He also defied the EU in supporting South Stream, a Russian-backed pipeline that would have circumvented Ukraine, until Putin canceled the project last year, citing the EU’s opposition.

Russia backs connecting a planned new pipeline running from Turkey through Greece and the Balkans to Hungary, Putin said.

The Hungarian leader has also rankled some of his EU counterparts and the government in Kiev with a call for autonomy for ethnic Hungarians in Ukraine, echoing similar demands for the Russian minority by the Kremlin.

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