Oil & Gas

Csanádpalota Natural Gas Compression Station Inaugurated

Hungarian gas transmission system operator FGSZ Földgázszállító, a unit of MOL, inaugurated a HUF 6 billion compressor station necessary for reverse flow of gas from Romania to Hungary in Csanádpalota (SE Hungary) on October 7.

The necessary investments on the Romanian side will be completed by May 2020, allowing bidirectional flow of at least 1.75 bln cubic meters of gas annually through the interconnector, Minister of Foreign Affairs and Trade Péter Szijjártó stated.

“Through creating an opportunity for the two-way transportation of natural gas between Hungary and Romania, the security of the country’s natural gas supply is further improving”, Péter Szijjártó declared at the inauguration of FGSZ Co. Ltd.’s new compressor station in Csanádpalota.

At the inauguration ceremony, Mr. Szijjártó said the interconnection of Hungary’s and Romania’s gas pipeline systems and increasing transport capacity is the most important energy security development project to take place in Hungary during the past five years. “Once the development projects have also been completed in Romania, the opportunity will be open to transport at least 1.75 billion cubic metres of natural gas in both directions each year”, he added.

The Minister stressed that the project is a major step forward for the whole of Southeast Europe, and is contributing to the establishment of the Bulgaria-Romania-Hungary-Austria energy corridor. “In the next phase of the development project, two-way gas transport capacity will be increased to 4.4 billion cubic metres”, the politician informed those present.

Mr. Szijjártó explained that the elimination of the existing one-sided energy supply is one of the greatest challenges facing the European Union. “In Central Europe, natural gas plays a major role with relation to the functioning of industry and supplying the population. Until now, the supply of natural gas has fundamentally come from a single source and along a single route”.

He mentioned that the establishment of north-south infrastructure is in the strategic interests of the region. “It will contribute to enabling shipments of natural gas from the gas fields in Azerbaijan to reach the region, to enabling liquid natural gas (LNG) arriving in Greece to also be taken into account with relation to supply, and also the natural gas to be extracted in future from the offshore gas fields under the Black Sea”, the Minister emphasised.

“There will be progress in the supply security of Central Europe if words are followed by deeds: if all the countries involved develop their transport systems and the links between their national gas pipeline networks are realised”, Mr. Szijjártó said, pointing out: “All this will make sense if we can also take new resources into account with relation to the region’s natural gas supply”.

The politician underlined the Hungary has done its homework: “The national transport system is operational, and we are continuously developing our international links”. “It is now time for everyone in the region and globally to complete their own homework”, he declared, adding that the West often puts forward expectations with relation to the diversification of the region’s energy supply, but has failed to provide the required assistance to date.

“Neither Romania nor Hungary are impeding the inclusion of new natural gas sources in the region’s gas supply; the only question is: will natural gas ever begin to be extracted from the Black Sea gas field, and if so, when?”, the Minister said.

“Hungary’s interests dictate that we cooperate with everybody, including with our existing partners, in the interests of assuring the country’s supply of natural gas”, Mr. Szijjártó emphasised. He explained that as a result of successful negotiations with Gazprom, Hungary’s natural gas supply has been guaranteed until the winter of next year. “All of Hungary’s gas storage facilities are full, and over 6.3 billion cubic metres of gas are primarily serving Hungarian consumption. In addition, Gazprom is also storing 950 million cubic metres of gas in Hungary in the interests of supply towards the east and south”, the politician told the press.

Mr. Szijjártó said Hungary is working with all neighbouring countries to connect their gas networks. “One of the goals of our cooperation with Serbia is to ensure that the natural gas arriving via the second strand of the Turkish Stream gas pipeline reaches Central Europe. Once the Bulgarian system operator issues its guarantee with relation to the quality of natural gas, a tender procedure for the pre-ordering of 10 billion cubic metres of natural gas may be issued for the Hungarian-Serbian border”, he stated.

President and CEO of MOL Plc. Zsolt Hernádi explained that the natural gas market of the whole region has become more flexible and secure thanks to the fact that the Hungarian gas pipeline system has been interconnected with practically every neighbouring country. “We have striven to ensure that the links between systems are two-way connections, but this has not been realised so far with relation to Croatia”, he added.

Mr. Hernádi said the increase in storage capacity, including the establishment of 1.9 billion cubic metres of strategic capacity, has improved the security of supply. “It is costing 200 million euros-a-year to maintain the infrastructure; the company will continue to assure this in future”, the President and CEO stressed.

President and CEO of FGSZ Co. Ltd. Szabolcs I. Ferencz said that the company has been working for ten years on linking the Hungarian-Romanian natural gas pipeline systems. “The establishment of the compressor station has enabled the transportation of 1.75 billion cubic metres of natural gas to Hungary, which is one fifth of Hungary’s consumption, in addition to the previous Hungarian-Romanian gas shipments. The 6-billion-forint (EUR 18 million) project was self-financed by the company and realised over a period of some twelve months”, he added.

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