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Hungary calls 'unexpected' halt to Ukraine gas supply

AFP
A compressor station of Ukraine's Naftogaz national oil and gas company near the northeastern city of Kharkiv on August 5, 2014

Hungary's gas pipeline network operator FGSZ said Thursday it was indefinitely suspending gas supply to neighbouring Ukraine for technical reasons, a move branded "unexpected and unexplained" by Ukraine state-owned gas firm Naftogaz.

In a statement to Hungarian news agency MTI, the state-run FGSZ said that supply to Ukraine had been stopped "indefinitely from 1600 GMT Thursday".

The company said the move was to service an increase in demand.

"System users have notified us that starting on the gas day of September 26, demand for imports will grow significantly," FGSZ said.

A transit hub at Beregdaroc on the Ukraine-Hungary border requires technical work to enable the increased inflow, it added.

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According to FGSZ, up to 6,1 billion cubic metres of gas per year -- 16.8 million per day -- has been delivered to Ukraine since March 2013.

The capacity is not guaranteed, however, as it is "dependent on prevailing technical and commercial conditions," the company said.

Late Thursday Ukrainian gas operator Naftogaz, which has contracts with Western European companies to supply gas to Ukraine via Hungary, confirmed that the flow of gas had stopped.

In an emailed statement Naftogaz said it "deeply regrets" the "unexpected and unexplained" Hungarian decision.

It called on FGSZ to "respect their contractual obligations and EU legislation" which it said regulate the flow of gas in both directions between Ukraine and Hungary.

"Such a decision goes against the core principles of the European Union single energy market," Naftogaz said.

The halt in supply came days after a meeting in Budapest between Alexei Miller, head of Russian gas giant Gazprom, and Hungarian Prime Minister Viktor Orban, who often warns against damaging commercial relations with Russia.

According to MTI, the two men on Monday discussed the preparatory work on Russia's South Stream gas pipeline project -- which is planned to pass through Hungary -- as well as "stable and reliable natural gas supply for the winter".