BUDAPEST (Reuters) -Hungary has agreed with Russia's Gazprom (MCX:GAZP) to reroute gas shipments to Hungary to the TurkStream pipeline, with the sides also finalising the terms of a deferred payment mechanism, Foreign Minister Peter Szijjarto said on Wednesday.
Under a 15-year deal signed last year, Hungary receives 3.5 billion cubic metres (bcm) of gas per year via Bulgaria and Serbia under a long-term deal with Russia and a further 1 bcm via pipeline from Austria.
Hungary's trade deficit has ballooned this year because of surging energy costs, increasing its vulnerability and weakening the forint, which plunged to a record low versus the euro on Wednesday. EU member Hungary largely relies on Russian gas and oil.
After talks with Alexei Miller, head of Russian state-controlled natural gas monopoly Gazprom in Moscow, Szijjarto said those shipments would be re-routed to the TurkStream pipeline, which brings gas to Hungary via Serbia.
"The TurkStream pipeline will play an even more important role in the gas supply of southeast and central Europe than before," Szijjarto said in a Facebook (NASDAQ:META) video.
"Gazprom has affirmed its commitment to the long-term operation of the TurkStream pipeline as well as its commitment to the long-term predictability of gas shipments to Hungary."
Earlier this month, Hungarian state-owned energy group MVM agreed with Gazprom to defer its payments for gas purchases exceeding a certain threshold value, allowing Hungary to pay for the gas over three years if prices surge.
"No restrictions will be needed in Hungary with regard to gas consumption," Szijjarto said, adding that Hungary, a strong critic of European Union sanctions on Russia over its invasion of neighbouring Ukraine, would maintain its opposition to any European sanctions on Russian gas.
"I have affirmed to Alexei Miller that Hungary will continue to insist that gas shipments and related activities cannot fall under sanctions restrictions," Szijjarto said.