Business news from Ukraine

UKRAINE DISAPPOINED WITH HUNGARY’S DECISION TO SIGN CONTRACT WITH RUSSIA’S GAZPROM FOR SUPPLY OF GAS BYPASSING UKRAINE

Ukraine is surprised and disappointed with Hungary’s decision to sign a new long-term contract with Russia’s Gazprom in Budapest on September 27, 2021, regarding gas supply to Hungary bypassing Ukraine, the Ukrainian Foreign Ministry said in a statement.
“We view this as nothing but a political, economically unfounded decision, which has been made to the benefit of the Kremlin and to the detriment of national interests of Ukraine and Ukrainian-Hungarian relations, in violation of the principles of the Treaty of Neighborliness and Cooperation between Ukraine and the Hungarian Republic dated December 6, 1991,” the statement said.
The Ukrainian Foreign Ministry has initiated a delay of the next meeting of the Joint Ukrainian-Hungarian Intergovernmental Economic Cooperation co-chaired by the two foreign ministers, which was planned for September 29-30.
“Earlier today, the Ukrainian Foreign Ministry initiated a delay of the Commission meeting, considering that the Hungarian-Russian gas agreement will have a substantial influence on the energy security of Ukraine and Europe, and will create new circumstances that require a comprehensive analysis of risks and threats and coordinated efforts of countries of the region in order to minimize its negative implications,” the statement said.
The Ukrainian side will also apply to the European Commission to provide an assessment of the conformity of the new Hungarian-Russian gas agreement with European energy legislation.

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DISCONTINUING GAS TRANSIT ACROSS UKRAINE WOULD DAMAGE HUNGARY

Hungary is interested in the continuation of natural gas transit across Ukraine, Hungarian Foreign Minister Peter Szijjarto said.
“I don’t understand why not ship gas via the southeastern route [after the launch of the Nord Stream 2 gas pipeline]. Hungary views this matter from a strategic standpoint, because the absence of transit across Ukraine would cause damage to our country,” Szijjarto said at a press conference following negotiations with Russian Foreign Minister Sergei Lavrov.
Each country should make decisions on sources and routes of energy supply primarily based on its own national interests,” he said.

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HUNGARY INCLUDES RAILWAY IN TRANSIT ROUTES FOR UKRAINIAN CITIZENS

Hungary has included the railway in the list of possible transit routes for Ukrainian citizens, Ukrainian Foreign Minister Dmytro Kuleba said.
“A week ago, Peter Szijjarto and I agreed that Hungary would allow transit to Austria for Ukrainians traveling by train. The Hungarian government has fulfilled the agreement and included the railway in transit routes just when the visa-free regime is being restored. We are expanding the freedom of travel of Ukrainians,” Kuleba wrote in Twitter on Thursday.

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HUNGARY RESUMES OPERATION OF 2 CHECKPOINTS WITH UKRAINE

Hungary on Wednesday, July 7, has resumed the passage of persons and vehicles through the checkpoints Lónya and Barabash.
“We ask citizens who plan to cross the border with Hungary to take into account that the pass is carried out at the checkpoint Kosyno – Barabash from 8:00 to 20:00 [Kyiv time] and at the checkpoint Dzvinkovoe – Lónya from 8:00 to 19:00 [Kyiv time],” the State Border Guard Service of Ukraine said on Wednesday.
Earlier, the Hungarian side reported that the ability to cross these checkpoints was temporarily limited. The work of checkpoints on the Ukrainian side did not stop.

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SERBIA AND HUNGARY COMPLETE PIPELINE BYPASSING UKRAINE

Serbian company Srbijagas and Hungary’s FGSZ have finished building the linear section of a gas pipeline connector between the two countries through which Hungary will be able to receive Russian gas transported through a Black Sea pipeline instead of through Ukraine.
Serbia’s national TV channel reported the welding of the “golden” joint of the pipeline on the border between the two countries.
Gas supplies along the new route are supposed to start on October 1, the beginning of the new gas year.
The TurkStream pipeline, which carries Russian gas across the Black Sea to Turkey and onward to Southern Europe, went into operation in January 2020. Turkey, Bulgaria, Greece, Macedonia and Romania were the first to receive gas through the pipeline. Serbia, as well as Bosnia and Herzegovina began receiving gas along the new route at the start of 2021. In future, TurkStream gas is also supposed to reach Austria through Hungary.
The first phase of the connector between Serbia and Hungary, with capacity of 6 billion cubic meters per year, involved building a 15-km linear pipeline section.
The expansion of the connector to 8.5 bcm per year has been postponed from October 2022 to October 2023. Hungarian gas companies and officials lost time in the middle of 2020 due to concerns that they might be hit by U.S. sanctions.
The U.S. State Department issued a new clarification on section 232 of the Countering America’s Adversaries Through Sanctions Act (CAATSA) on July 15, 2020, stating that sanctions could be imposed against investors in Russian export energy pipeline projects. The new clarification extended the possibility of imposing sanctions against persons investing, or providing goods and services, directly and that significantly facilitate the construction of the Nord Stream 2 gas pipeline and the second string of the TurkStream pipeline.
Hungary imported 8.637 bcm of Russian gas in 2020.

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UKRAINE AND HUNGARY PLAN TO HOLD BUSINESS FORUM

Ukraine and Hungary will soon hold a business forum of Ukrainian and Hungarian companies, Ukrainian Foreign Minister Dmytro Kuleba said.
“We also agreed to structure our interaction on cooperation programs that Hungary is implementing in Zakarpattia region. You know that both Péter [Szijjártó] and I pay great attention to the development of trade, therefore we also agreed to immediately hold a business forum of Ukrainian and Hungarian companies under the auspices of our two ministries,” Kuleba at a joint press briefing with Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó in Uzhgorod on Wednesday.
The Ukrainian minister said that both countries are striving for the growth of trade, interpersonal contacts, infrastructure projects, political contacts.
“We, as you know, have a very intensive and rich dialogue with my Hungarian colleague, the goal of which is to ensure rich, dynamic and effective interaction between Ukraine and Hungary. It will not be an exaggeration to say that we have already achieved a lot in this area: we renewed trust in our dialogue, we held a meaningful meeting of the bilateral Ukrainian-Hungarian economic commission, we started to move towards the implementation of a number of common infrastructure and trade projects,” Kuleba said.
However, Hungarian Minister of Foreign Affairs and Trade said that Hungary is ready to “steer bilateral relations in the right direction” and named a number of projects that Budapest is ready to implement.
“I noted to my colleague that we are ready to co-finance the reconstruction of Berehove hospital. We are ready for the reconstruction of the bridge that crosses the Tisza River, which passes near the Chop-Zahony checkpoint. We are ready to take part in the construction of a bypass road in Berehovo and its construction to the border. We are ready to open a border checkpoint. We are ready to finish the M3 highway to the Ukrainian border by 2021,” Szijjártó said.
He said that Hungary will continue to help Ukraine and noted that over six years his country has already invested HUF 90 billion in the development of Zakarpattia.
“We recognize the territorial integrity of Ukraine, we support gas supplies that go to Ukraine, we provide transit through Hungary for Ukrainian citizens who travel to Europe. And in the OSCE mission, which operates in eastern Ukraine, one of the largest groups is Hungarian specialists,” the head of the Foreign Ministry said.

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