The demand for energy has reflected well on Qatar’s oil and gas sector, with state-owned QatarEnergy recording a net profit of $42.47 billion.
Qatar is set to provide Hungary with liquified natural gas (LNG) starting from 2027 as the European country seeks to diversify its energy resources, Budapest’s Foreign Minister Peter Szijjarto confirmed on Friday.
“We have reached a political agreement, which is now followed by talks between energy companies Qatargas and Hungary’s MVM to determine the quantity, pace and shipment route of the supplied gas to Hungary from 2027,” Szijjarto told the press, as quoted by Reuters.
However, the official made no mention of the duration of the deal nor the amount of LNG that is expected to be exported to Hungary.
The statement comes as Qatar’s Amir Sheikh Tamim bin Hamad Al Thani is scheduled to land in Budapest on Sunday for an official visit in response to an invitation from Hungarian President Katalin Novak.
Last year, European countries reached out to Qatar in a bid to ditch their heavy reliance on Russian gas as Moscow launched an invasion on Ukraine.
Europe previously received 40% of its gas supplies from Moscow, and almost a third of the shipments passed through Ukraine before tensions caused a drop in numbers.
Meanwhile, Hungary receives 4.5 billion cubic metres (bcm) of gas per year through Bulgaria and Serbia as part of a 15-year deal it inked with Russia in 2021.
Szijjarto previously stressed that agreements with the Gulf countries on oil and gas supply to Hungary do not mean the abandonment of contracts with Russia, but are rather aimed at diversification.
The Hungarian foreign minister’s statements came months after Prime Minister Viktor Orban said his country sought to purchase LNG from the Gulf energy giant after 2026. Orban had revealed in May that official talks were still ongoing at the time.
“Over the past year, we have learned that Qatar is a country of key importance for Europe. The European economy has made up for a significant part of the missing Russian gas with LNG coming from here… We agreed on energy cooperation, we will also buy gas from here – it is always better to stand on several legs than on one,” Orban told Bloomberg at the time.
Reliable energy partner
The demand for energy has reflected well on Qatar’s oil and gas sector, with state-owned QatarEnergy recording a net profit of $42.47 billion (QAR 154.6 billion) in 2022, representing a 58% year-on-year increase.
In May last year, Sheikh Tamim embarked on a tour around Europe that saw energy talks at the centre of the agenda. The tour included countries such as Slovenia, Spain, Germany, the United Kingdom and France.
One key outcome of the tour was the signing of an agreement with Germany’s energy ministry. Then in November of the same year, Germany signed a 15-year LNG agreement with Qatar, though flows are expected to start in 2026.
The high demand for energy has further solidified Qatar’s position as a top supplier. Doha is currently racing towards the front of the global LNG race with its multi-billion North Field Expansion project.
The mega project, the largest of its kind on a global scale, is set to ramp up Qatar’s LNG production to 126 mtpa by 2027.
According to Wood Mackenzie’s July assessment, Qatar and the United States are leading the LNG race.
Competitive pricing and strategic commercial partnerships between Qatar and the US have positioned them to potentially secure a combined market share surpassing 60% by 2040.
“Qatar managed to increase production slightly last year in order to help meet increased global demand for LNG following the reduction of Russian pipeline exports to Europe, underlining its role as a secure source,” Jamie Ingram, Senior Editor at Middle East Economic Survey (MEE), told Doha News last month.
