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Historical Hungarian-American cooperation to diversify the energy supply of the Central and Eastern European region

On January 3, the Tristar Ruby LNG tanker shipped 143,000 cubic meters of LNG from the United States, marking the start of commercial use of the terminal.

According to MVM Group, the first shipment of liquefied gas was successfully unloaded at the Krk LNG terminal in Croatia and was then handed over to MFGK Croatia d.o.o., a Croatian subsidiary of Magyar Földgázkereskedő Zrt., part of the MVM, established in 2020.

On January 1, 2021, the tanker Tristar Ruby entered the Krk LNG terminal with a shipment of 91 million cubic meters of liquefied natural gas. This also represented the commercial commissioning of a new natural gas supply route of strategic importance to Hungary and Croatia as well as the start of MFGK’s role at the Krk LNG terminal.

On June 5, 2020, MFGK signed an agreement to contract a total of 6.75 billion cubic meters of capacity for approximately seven years of deliveries, with the January 1 shipment being its first consignment.

With the commissioning of the Krk LNG terminal and the start of LNG procurement, a new era begins in Hungary’s supply of natural gas.

Through the Krk LNG terminal and the concluded source agreements, Hungary has realized real source and route diversification in its LNG supply, as Hungary is now connected to the global LNG market through MFGK and has direct access to natural gas sources and new market participants. The LNG resources purchased by MFGK at the terminal come exclusively from Western European market participants.

The involvement of MFGK is in line with MVM Group’s strategic goal of natural gas sourcing, route diversification and regional expansion. By purchasing LNG through the Krk LNG terminal, MVM is contributing even more to the domestic and regional security of natural gas supply efforts. MFGK’s involvement also fits MVM’s regional growth strategy for six markets including Austria, Slovakia, the Czech Republic, Croatia, Serbia and Romania. In addition to capacity allocation and delivery contracts, MVM has now directly entered the Croatian natural gas market through its local subsidiary.

Securing the country’s natural gas supply from several sources and on several routes has been an important part of Hungary’s economic strategy and national strategy, as well as a national security issue.

Hungary had a special interest in the commissioning of the LNG regasification terminal on the Croatian island of Krk on January 1, 2021, as it gave Hungary direct access to global LNG markets — a priority for the Hungarian Government, as itemized in its new National Energy Strategy.

Krk LNG is also in line with the European Union’s natural gas source and route diversification efforts. As the terminal is one of the endpoints of the North-South Gas Corridor, it is a priority project of the Central and South-Eastern European Energy Interconnection Initiative and in line with the EU’s liquefied natural gas strategy adopted in 2016. 

The EU provided EUR 101.4 million in financial support from the Connecting Europe Facility for the construction of the terminal.

The first LNG shipment also represents the success of Croatia’s and Hungary’s multi-year cooperation aimed at strengthening the security of the region’s natural gas supply.

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