Hungary Grasps for Leverage in Russia Energy Negotiations

The head of the Hungarian parliament, Antal Rogan, said Oct. 15 that a proposed natural gas bill that would allow the state to pre-emptively buy Hungarian oil and natural gas consortium MOL's strategic natural gas reserves is intended to prevent foreign influence on Hungary's supplies. The bill, presented to parliament Oct. 12, does not mandate the nationalization of MOL's natural gas reserves but rather gives the state the option of nationalization should Hungarian ownership of those highly strategic reserves be threatened.

The proposed legislation is the latest move in Hungary's quest to reduce foreign influence in its energy sector and, more important, would cement Budapest's control over Hungary's natural gas storage facilities. These are of particular strategic importance to Moscow because they are critical to the operation of the South Stream pipeline and the projection of Russian natural gas in Southern and Central Europe via the nearby Baumgarten trading hub in Austria. Hungary is solidifying its grip over its storage capacity to gain leverage in future energy negotiations with Russia.