Hungarian state-owned energy conglomerate MVM has agreed to purchase a 5% stake in Azerbaijan's Shah Deniz gas field from state-owned Southern Gas Corridor (SGC).  

This move aligns with the EU's diversification efforts and Hungary's national energy strategy.  

BP operates the Shah Deniz field, one of the world's largest natural gas-condensate fields, which is located in the Caspian Sea. 

MVM will also take a 4% stake in the Azerbaijan Gas Supply Company, the entity responsible for marketing and selling Shah Deniz's natural gas.  

This transaction is a strategic step for Hungary, which has been reliant on Russian gas imports, especially in the wake of geopolitical tensions following Russia's invasion of Ukraine in 2022. 

Hungarian Foreign Minister Peter Szijjarto, as reported by Reuters, highlighted the significance of this deal, stating, "acquiring a stake in this gas field gives us (Hungary) a protection from big energy price swings".  

The Shah Deniz field, which was discovered in 1999, has a production capacity of up to 29 billion cubic metres (bcm) of natural gas and around 60 million barrels (mbbl) of condensate annually. 

Since its inception, Shah Deniz has produced more than 218bcm of natural gas and 371mbbl of condensate.  

The gas is transported via pipelines to various Azerbaijani, Georgian, Turkish and European partners, under long-term agreements with the Azerbaijan Gas Supply Company. 

With the acquisition of the Shah Deniz stake, MVM Group will join forces with SGC and other energy companies, including bp with a 29.99% stake, Lukoil with 19.99%, TPAO with 19% and NICO with 10%, in the joint venture.  

The transaction is expected to close in the third quarter of 2024, subject to customary conditions precedent.