Kazakh to Supply Oil to Hungary Through Druzhba Pipeline

Kazakhstan has agreed to supply oil to Hungary later this year via Russia’s Druzhba pipeline, also known as the Friendship Pipeline and the Comecon Pipeline, one of the world’s longest oil pipelines and one of the largest oil pipeline networks in the world.

Besides Hungary, even Serbia is keen to fast-track new energy connections with Hungary to conserve its energy security after the new US sanctions has impacted oil ties with Russia.

The Kazakhstan and Hungary reached the agreement at a high-level meeting between Kazakh Energy Minister Almassadam Satkaliyev and Hungarian Minister of Foreign Economic Relations and Foreign Affairs Peter Szijjarto early this week.

During the talks, the ministers reviewed the current state and future prospects of bilateral energy cooperation, with a particular focus on the partnership between KazMunayGas and Hungary’s MOL Group.

Both sides also emphasised the strategic importance of their collaboration in the oil and gas sector, including joint participation in the Rozhkovskoye gas condensate field, the large gas condensate field in the West Kazakhstan region, which went commercially on stream in December 2023. Rozhkovskoye’s recoverable gas reserves are 26.9 billion cubic meters (BCM) of gas and 12,500 tonnes of condensate. Annual gas production should peak at 1 BCM and condensate production at more than 500,000 tonnes. Annual production of liquefied gas for the domestic market will exceed 150,000 tonnes.

The field is operated by Ural Oil and Gas (UOG), a joint venture between KMG with 50%, Hungary’s MOL Caspian Oil and Gas with 27.5% and First International Oil Corporation, a subsidiary of China’s Sinopec, with 22.5%.

Nuclear Energy

In addition to oil supplies, Kazakhstan expressed interest in Hungary’s expertise in nuclear energy, particularly in the production of dry cooling towers for nuclear power plants by MVM Group. The discussion highlighted opportunities for knowledge exchange and potential future projects in this field.

Satkaliyev said that Kazakhstan highly valued ​​its strategic partnership with Hungary and there was a great potential for expanding cooperation in both the oil and gas sector and the peaceful use of nuclear energy.

He expressed confidence that the joint efforts will contribute to the sustainable development of the energy systems in both countries and enhance their energy security. Both sides reaffirmed their commitment to strengthening energy ties and outlined plans for further collaboration.

Kazakh-Hungary Relations

In 2024, the trade turnover between Kazakhstan and Hungary grew by 4.4%, reaching nearly $200 million. To achieve the $1 billion trade target set by their leaders, both countries agreed to implement additional measures.

Hungary’s direct investments in Kazakhstan have exceeded $370 million, with 16 joint projects worth $700 million currently underway in sectors such as energy and industry.

Notably, MOL has invested $200 million in developing the Rozhkovskoye gas condensate field in Western Kazakhstan. Another company Globalia is constructing solar power plants across various regions, and UBM Holding plans to build three feed factories worth $62 million this year.

Currently, around 30 Hungarian companies and 40 joint ventures are actively operating in Kazakhstan. Since 2005, Hungary’s direct investments in Kazakhstan have surpassed $370 million.