Hungarian companies sign deal for Azerbaijani oil supplies via BTC pipeline

Hungary’s MOL Group has signed a crude oil trading agreement with fellow Hungarian energy company MVM to jointly supply oil and condensate from the Caspian region to the port of Ceyhan in Türkiye.

The deliveries will be made via the Baku–Tbilisi–Ceyhan (BTC) pipeline, with the crude oil destined for MOL’s refining and distribution markets, the company announced in a press release cited by local media.

According to MOL, the deal marks a significant step in the further diversification of energy supplies for Central Europe, especially for landlocked countries such as Hungary and Slovakia. Under the terms of the agreement, MOL will be able to increase the volume of alternative crude oil processed at its refineries to as much as 160,000 tonnes per year.

“Through this cooperation, MOL and MVM will jointly transport crude oil with condensate from the Caspian region to the terminal in the Turkish port of Ceyhan via the Baku–Tbilisi–Ceyhan (BTC) pipeline, from where the feedstock will be forwarded to MOL’s markets,” the statement said.

MOL has been using Azerbaijani crude oil in its operations for several years. In 2020, the company acquired a stake in the Azeri–Chirag–Gunashli (ACG) offshore oil field block, one of Azerbaijan’s most important production sites. In 2024, MOL delivered 5 million barrels of oil from the ACG block to Central Europe.

MVM, meanwhile, entered the Azerbaijani market in 2024 as an investor by acquiring a 5% share in the Production Sharing Agreement (PSA) for the Shah Deniz gas condensate field.

To enhance the region’s energy diversification, MOL is currently purchasing an average of 100,000 barrels of condensate per month, equivalent to one full tanker load, sourced from the Shah Deniz field. The newly announced cooperation between MOL and MVM envisages additional deliveries, corresponding to approximately two full tankers of Azerbaijani oil per year, on top of the regular monthly supplies already conducted by MOL.

MOL has already been refining Azerbaijani oil at its facilities for several years. In March 2023, the company delivered a shipment of Azeri Light crude from the ACG block to its Slovnaft refinery in Bratislava. That delivery amounted to between 80,000 and 90,000 tonnes. The shipment was loaded at the port of Ceyhan and transported to Slovakia via the Adriatic oil pipeline. Before 2023, the Slovnaft refinery had conducted successful tests of various crude oil blends from the Middle East and the Caspian region. However, refining oil from a field in which MOL held an ownership stake marked a significant milestone for the company.

MOL emphasised that “the international cooperation between Hungary’s two leading energy companies is not only of economic importance but also holds strategic significance, as jointly chartered tankers directly contribute to strengthening the country’s energy security.”

Currently, MOL holds a 9.57% stake in the development of the ACG oil field block in Azerbaijan and an 8.9% stake in the BTC pipeline project. Additionally, on September 20, 2024, the State Oil Company of the Azerbaijan Republic (SOCAR) and MOL Hungarian Oil and Gas signed a memorandum of understanding on the exploration, development, and production of the onshore “Shamakhi–Gobustan” block in Azerbaijan.

Furthermore, Hungary’s MVM Group has deepened its presence in the Azerbaijani energy sector. In 2024, it acquired a 5% stake in the Shah Deniz project from Azerbaijan’s CJSC Cenub Qaz Dehlizi (CQD), and a 4% stake in the South Caucasus Pipeline Company (SCPC), the operator of the South Caucasus natural gas pipeline, from Azerbaijan Gas Supply Company Limited (AGSC). The acquisition agreement was signed on June 5, 2024, and the deal was officially closed on August 30.

By Tamilla Hasanova