Russia, Hungary plan South Stream gas pipeline JV

18:40, 10 March 2009
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Russia and Hungary...

Russia and Hungary plan to create a joint venture to work on the Hungarian section of the South Stream natural gas pipeline, Russian Prime Minister Vladimir Putin said on Tuesday, according to Reuters. The proposed $20 billion South Stream pipeline, a project involving Russian gas export monopoly Gazprom (GAZP.MM) and Italian energy firm Eni SpA (ENI.MI), is a potential route to supply Russian gas to Europe, bypassing Ukraine.

"An agreement between Gazprom and the Hungarian Development Bank is ready for signing," Putin told reporters after meeting Hungarian Prime Minister Ferenc Gyurcsany in Moscow.

Russia, supplier of a quarter of Europe`s gas, and some of its customers in Europe have expressed interest in accelerating the construction of routes to bypass Ukraine after a row between Moscow and Kiev disrupted supplies for two weeks in January.

"Hungary is not interested in there being one gas pipeline or one oil pipeline," Gyurcsany said. "Hungary is interested in having as many pipelines as possible."

Putin said Gazprom and Hungarian oil and gas firm MOL MOLB.BU also planned to build an underground gas storage facility in Hungary.

Gyurcsany said the new facility would allow Hungary to increase its gas storage to the point where it could supply half of its annual demand.

Existing storage facilities had softened the blow to Hungary from the dispute between Russia and Ukraine this year, he said.

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