On Tuesday, Shell PLC ( SHEL ) agreed to sign a new long-term natural gas purchase deal with Hungary, which the country's foreign minister called its "largest volume and longest western supply contract ever."

The agreement was confirmed in remarks reported by Reuters, which cited Foreign Minister Peter Szijjarto saying the signing would take place later in the day. He did not disclose the contract's length or volumes.

Szijjarto said, "Later today we will announce the signing of a new long-term contract with Shell," while adding that Hungary cannot fully wean itself off Russian gas without further infrastructure development in the region.

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According to Reuters, Hungary's previous long-term deal with Shell was signed in 2020, covering 250 million cubic meters of gas annually between 2021 and 2027. That agreement marked the country's first long-term LNG contract with a Western company.

Hungary consumes around 8 billion cubic metres of gas a year. It is still the biggest buyer of Russian gas in the European Union.

Reuters reported that earlier this year Hungary and Slovakia opposed European Commission proposals to phase out Russian energy imports, reflecting Hungary's reliance on supplies from Moscow.

While the Hungary agreement signals Shell's continued role in European gas markets, the company also moved last week to scale back ambitions in biofuels. On September 3, Shell announced its subsidiary, Shell Nederland Raffinaderij B.V., will not resume construction of a planned biofuels facility at the Shell Energy and Chemicals Park in Rotterdam.

Shell said that the decision followed a "thorough commercial and technical review" of the project's competitiveness. Construction at the 820,000-tonne-per-year facility had already been suspended in July. The project had been a centerpiece of Shell's push into renewable fuels, and the cancellation reflects a more selective investment approach amid cost pressures.

Price Action: SHEL shares were trading higher by 1.25% to $72.62 at last check Tuesday.

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