Final investment decision approved for South Stream in Hungary
Alexander Medvedev, Deputy Chairman of the Gazprom Management Committee paid today a working visit to the Republic of Hungary. Leonid Chugunov, Head of the Project Management Department also joined the trip.
As part of the visit a meeting was held with Csaba Baji, Chairman and Chief Executive Officer of MVM. A new shareholders agreement of the South Stream Hungary Zrt. joint project company was signed.
Within the signed shareholders agreement the parties approved the final investment decision for building the Hungarian section of the South Stream gas pipeline. The section will be 229 kilometers long.
In addition, the Hungarian party announced that the South Stream gas pipeline was granted the status of a national significance project in Hungary.
“The project for building the South Stream gas pipeline jointly with our Hungarian partners is a crucial element in the new architecture of the European energy security. Such a system is able to ensure uninterrupted gas supplies and provide Hungary with long-term benefits and stability,” said Alexander Medvedev.
“With the Hungarian Government's support, we are committed to increasing energy security and diversifying the routes of natural gas supply to the European Union. The South Stream project is an important part of our long-term strategy and represents a significant step towards realizing our ambitions on transforming MVM into a successful integrated national energy group with a regional reach and a solid reputation on the market,” said Csaba Baji.
In 2011 Russian gas supplies to Hungary totaled 6.26 billion cubic meters.
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 Zrt. (MFB) signed the Basic Cooperation Agreement to construct a gas pipeline and transit natural gas via 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) is a new contractor.
MVM is a Hungarian state-owned company focused on power supplies. MVM owns the national gas transmission system and secures energy supplies to the domestic market.