The Hungarian Ministry of Foreign Affairs has announced that Hungary and Serbia have agreed on the construction of a new, 128 km-long oil pipeline. It will be built between the towns of Algyo (Hungary) and Novi Sad (Serbia) to ensure the security of supplies.
The project will be developed by Hungary’s MOL Group and Serbia’s Transnafta, which are expected to sign a formal agreement on the pipeline on 20 June 2023. The project, which is estimated to cost around €100m, would allow the supply of Russian oil to Serbia via the Druzhba oil pipeline, as Serbia is currently facing a ban on crude oil imports from Russia via Croatia after the European Union agreed on new restrictions against Russia.
In addition, Hungary and Serbia have also agreed that the national gas companies MVM and Srbijagas would establish a joint regional natural gas trading company, and that Hungary would continue to store 100 mcm of natural gas for Serbia in 2023. In May 2022, the two countries had reached a gas agreement, providing Serbia a storage capacity of 500 mcm in Hungary for the 2022-2023 heating season.
Hungary and Serbia are currently connected through an 8.5 bcm/year gas interconnection that was completed in 2021 (expansion of the Turkish Stream pipeline to Hungary).