On November 14th, 2018, the US Secretary of Energy Rick Perry’s official visit to Hungary was held in the framework of a series of visits to the countries of Central and Eastern Europe (Poland, Ukraine, Czech Republic).
During a joint press conference with Hungarian Foreign Minister Peter Szijjarto, Perry noted that Washington is opposed to the construction of a Russian pipeline to Central Europe, referring to the second branch of the Turkish stream, and against the participation of Hungary in the project. In addition, Perry advised Hungary to consider building LNG infrastructure, emphasizing the rapid development of LNG market.
The Hungarian position expressed by Peter Szijjarto is such that the LNG terminal on the island of Krk, Croatia, as well as the gas areas on the Romanian Black Sea shelf, may be a solution for Hungary. As was noted by the Hungarian minister, natural gas from Krk is too expensive for Hungary, and the development of deposits on the Romanian Black Sea shelf depends on the investment decisions of the consortium of the American energy company “Exxon Mobil” and the Hungarian “OMV”, and in this context, Hungary expects more active efforts of the US in these directions. At the same time, the Hungarian side expressed its readiness to build the necessary infrastructure.
It should be noted that in July 2017, the Hungarian ambitions of becoming a regional gas hub led to the decision of the Orban government to suspend the construction of the BRUA pipeline (Bulgaria, Romania, Hungary, Austria) on its territory to the Austrian hub of Baumgarten. At the moment, Romania and Hungary do not have a common vision of the possible volume of gas supply through the BRUA pipeline to Hungary. In June 2018 Kristof Terhes, the chairman of the Hungarian gas transmission operator “FGSZ”, appealed to Romanian officials to allow a flow of 4.4 billion cubic meters of gas annually through the forthcoming BRUA, after which Szijjarto made statements that Romania’s slowdown with the approval of volumes of future supplies through the pipeline would jeopardize the energy security of the region as a whole.
Obviously, the visit of R. Perry to Hungary was intended to signal to the Hungarian premier Orban that active support of the Turkish flow would jeopardize the possibility of supplying gas from the Romanian shelf to Hungary.
On November 14th, Rick Perry arrived in Prague where he met with Czech Prime Minister Andrei Babish. The main topic of the meeting was the discussion of nuclear energy. In this context, the United States is interested in participating in the construction of a new power unit “Dukovany”, which could potentially start in 2025 with the subsequent commissioning in 2032.
Among the potential contenders for the construction of the power unit, apart from “Westinghouse”, Russian “Rosatom”, the French “Areva” and companies from South Korea and China are considered. The Government of Andrei Babich has not yet made a decision on the terms of the tender. Some politicians from the inner-circle of the president of the Czech Republic, Milos Zeman, are actively promoting an intergovernmental agreement with Russia, while others are in favor of a commercial contract and an open tender. Perry’s visit is associated with a series of visits of US high-ranking officials to the Czech Republic, in particular, visit of James Mattis, the Defense Minister, at the end of October 2018 and visit of Paul Ryan, a speaker for the US House of Representatives at the end of March 2018, which should be seen as a deliberate effort of the Trump Administration to lobby an open tender in view of participation of the American company “Westinghouse” in the tender.
Thus, the visit of Rick Perry to Poland, Ukraine, Hungary and the Czech Republic aimed primarily at pragmatic goals promoting the interests of American energy companies. In addition to promoting US interests in the liquefied gas market and lobbying “Westinghouse”, the Trump Administration is actively seeking foreign markets for the export of American coal, since its domestic consumption has fallen to the lowest level since 1983 due to the closure of a number of coal thermal power stations as a result of emergence of low-cost gas from its own production.
In 2018, according to the US Department of Energy, Europe has become the largest US coal export market, in particular, due to supplies to Eastern Europe – Poland and Ukraine. In this context, there is an indicative interview with the US Secretary of State at Trepilskaya thermal power station, which uses coal imported from the United States.
Therefore, the visit of the US energy minister to the countries of Central and Eastern Europe should be considered, first of all, from the position of promotion of US energy resources in the region.
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