Hungary's Magyar blocks Naftogaz-MOL oil storage project for Ukraine
Hungarian Prime Minister Péter Magyar told parliament on 21 September that his government will not allow the construction of petroleum product storage facilities in Hungary for Ukraine, days after Naftogaz signed a memorandum with Hungarian energy company MOL on the project near the Ukrainian-Hungarian border. Magyar said negotiations between MOL and Naftogaz began under the previous Orbán government and that MOL acted without the current government's consent.
Key points
- On 20 September, Naftogaz and MOL signed a memorandum on building petroleum product storage capacity in Hungary near the Ukrainian-Hungarian border.
- Naftogaz acting board chairman Serhiy Fedorenko said the project would diversify fuel supply routes and place reserves outside the zone of Russian shelling.
- MOL said the project is at an initial preparatory stage that could take years, and that the Hungarian government was not yet informed because of the lengthy process.
- In parliament on 21 September, Prime Minister Péter Magyar said the storage facilities will not be built in Hungary as long as his Tisza party is in power.
- Magyar called MOL's actions unacceptable, said he spoke to MOL chairman Zsolt Hernádi on the evening of 20 September, and expects MOL to treat the Hungarian state as the owner of a 25% stake.
- KDNP parliamentary faction leader Bence Réltvári argued that relocating the storage to Hungary would transfer the risk of Russian bombing across the border and threaten Hungary's eastern regions.
- Magyar also said Hungary is not part of the Ukraine-initiated "Carpathian Eight" format and declined an invitation to join, citing "respectable reasons."
Why it matters
The decision blocks a Naftogaz-MOL project that Naftogaz presented as a way to safeguard Ukrainian fuel reserves outside the range of Russian strikes, escalating friction in Ukraine-Hungary relations beyond longstanding disputes over EU policy toward Russia. Because MOL is a major Hungarian energy company with a state-linked ownership stake, the clash also carries domestic political and corporate-governance implications in Hungary.
What happened
On 20 September, Ukraine's Naftogaz group signed a memorandum with Hungarian energy company MOL on building petroleum product storage capacity in Hungary near the Ukrainian-Hungarian border. Naftogaz acting board chairman Serhiy Fedorenko said the project would diversify fuel supply routes and place reserves outside the Russian shelling zone. MOL said the project is only at an initial preparatory stage that could take years and that the Hungarian government had not yet been informed because of the lengthy process.
The following day, 21 September, Hungarian Prime Minister Péter Magyar told parliament that his government will not allow the construction of storage facilities for Ukraine on Hungarian territory. He said that as long as his Tisza party is in power, no Ukrainian oil storage facility will be built in Hungary. Magyar added that MOL began negotiations with Naftogaz during the previous government of Viktor Orbán and that the current government considers it unacceptable that MOL conducted those talks without its consent.
Magyar also said he spoke to MOL chairman Zsolt Hernádi on the evening of 20 September, called MOL's actions unacceptable, and said he expects MOL to treat the Hungarian state as the owner of a 25% stake in the company. In the same parliamentary session, KDNP faction leader Bence Réltvári argued that relocating the storage to Hungary would transfer the risk of Russian bombing across the border and pose a national security threat, especially to Hungary's eastern regions. Magyar separately stated that Hungary is not part of the Ukraine-initiated "Carpathian Eight" format and that Budapest had declined an invitation to join, citing "respectable reasons."
How Ukrainian sources describe it
Ukrainian-language coverage has centered on the Naftogaz-MOL memorandum and its stated rationale: giving Ukraine fuel storage capacity beyond the reach of Russian shelling. Several Ukrainian outlets have focused on Ukraine's reaction to Magyar's statement, reporting that Ukraine expressed surprise at what it called confrontational remarks by the Hungarian prime minister.
Background
Naftogaz and MOL signed the memorandum on 20 September at the Carpathian Economic Forum, held within the "Carpathian Eight" format initiated by Ukraine. Naftogaz acting chairman Serhiy Fedorenko said the storage would diversify fuel supply routes and place reserves outside the Russian shelling zone. MOL said the project is only at an initial preparatory stage that could take years and that is why the Hungarian government had not yet been informed. KDNP parliamentary faction leader Bence Réltvári framed relocation of the storage to Hungary as a national-security risk for Hungary's eastern regions.