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Final investment decision on South Stream in Hungary to be taken by end of Oct

October 12, 2012, 3:41 UTC+3

In 2011 Russian gas supplies to Hungary totalled some 6.26 billion cubic metres

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MOSCOW, October 12 (Itar-Tass) —— A Gazprom delegation led by Alexei Miller, Chairman of the Gazprom Management Committee, has paid a working visit to the Republic of Hungary.

A meeting with Viktor Orban, Prime Minister of Hungary was held as part of the visit, Gazprom said.

The parties discussed the bilateral cooperation in the energy sector. The points at issue included Russian natural gas supplies to Hungary and the progress with the South Stream project implementation.

The procedure of replacing the accredited company responsible for the South Stream project implementation in Hungary was finished. Miller and Orban mentioned that the project was being implemented in strict compliance with the schedule and that the final investment decision on the project was to be made by the end of October 2012.

In 2011 Russian gas supplies to Hungary totalled some 6.26 billion cubic metres.

With a view to diversify the natural gas export routes, Gazprom is implementing the project for construction of a gas pipeline running under the Black Sea to the countries of Southern and Central Europe – the South Stream project.

In February 2008 Russia and Hungary signed the Intergovernmental Agreement envisaging Hungary's engagement into the South Stream gas transmission system project.

On March 10, 2009 Gazprom and Magyar Fejlesztesi Bank (MFB) signed the Basic Cooperation Agreement to construct a gas pipeline and transit natural gas via the Republic of Hungary as part of the South Stream project.

On January 29, 2010 Gazprom and MFB created the South Stream Hungary Zrt joint project company.

In October 2011 the Hungarian Government made a decision to replace the accredited company responsible for the South Stream project implementation in Hungary. MVM Zrt. (Hungarian Power Companies) will become a new contractor.

In the third quarter of 2011 the Consolidated Feasibility Study of South Stream was finalized and included the feasibility study of the offshore section and feasibility studies of the respective gas pipelines in the host countries of Southern and Central Europe.

On December 30, 2011 Vladimir Putin, Russian Prime Minister at that time, authorised Gazprom to speed up the launch of the South Stream project and to start its construction in 2012.

On January 20, 2012 Miller approved a detailed action plan that would make it possible to start construction of the South Stream gas pipeline's offshore section in December 2012.

On April 12, 2012 Gazprom's foreign partners on South Stream Transport AG finally joined the project company.

First pipeline gas supplies are slated for the late 2015.

South Stream, which will be jointly built by Gazprom and ENI, will eventually take 30 billion cubic metres of Russian natural gas a year to southern Europe.

South Stream is scheduled to become operational in 2013. The 900-kilometre-long undersea section of the pipeline will run from the gas compressor facility at Beregovaya, on Russia's Black Sea coast, near Arkhipo-Osipovka, towards the city of Burgas, in Bulgaria. The sea's maximum depth on this route is 2,000 metres.

South Stream is a strategic project for Europe's energy security and should be implemented by the end of 2015. The overall capacity of the marine section of the pipeline will be 63 billion cubic meters a year. Its cost is about 8.6 billion euro.


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