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Ukraine anger as Hungary signs gas supply deal with Russia's Gazprom

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By Josephine Joly  & Reuters
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The logo of Russia's energy giant Gazprom is pictured at one of its petrol stations in Moscow on April 16, 2021.
The logo of Russia's energy giant Gazprom is pictured at one of its petrol stations in Moscow on April 16, 2021.   -   Copyright  KIRILL KUDRYAVTSEV / AFP
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Ukraine has slammed a new gas deal between Hungary and Russian energy giant Gazprom.

Hungary's foreign affairs minister Péter Szijjártó signed a 15-year natural gas supply agreement with the firm on Monday.

The deal for 4.5 billion cubic metres of natural gas per year will account for half of Hungary's gas consumption and will guarantee supplies through new routes via Serbia and Austria, cutting off Ukraine as a transit country.

"Today, the reality is that Hungary's energy needs can be secured in the safest way by a long-term contract with Gazprom," Szijjártó said.

But under the new deal, Ukraine will lose millions in transit fees and Kyiv says it will be asking the European Commission to assess whether the agreement respects EU energy legislation.

Ukraine's foreign ministry issued a statement saying that Hungary's supply deal was a "purely political, economically unreasonable decision" that was taken "to the detriment of Ukraine's national interests and Ukrainian-Hungarian relations".

In response, Kyiv cancelled a meeting of a joint commercial committee with Hungary that was scheduled for Thursday.

Szijjártó defended the deal as the only economic reality to secure Hungarian energy needs.

The country has relied on Russia for most of its natural gas imports delivered via a pipeline through Ukraine, but in recent years Russians have diversified exports routes, constructing the Nord Stream pipelines to Germany and the TurkStream link to Turkey.

The Hungarian government announced at the end of August it had agreed with Moscow on all the conditions for a new long-term gas supply deal to take effect from October 1.

The duration for the agreement with Gazprom would be for 15 years, with a clause to change purchased quantities after 10 years.

Two routes will be used, with 3.5 billion cubic metres to come via Serbia and 1 billion cubic metres via Austria.