The South Stream gas pipeline project, to supply gas to Europe bypassing Ukraine, is a step closer to reality.
Announcing that Gazprom had reached agreement with the Hungarian Development Bank on the joint venture to build the Hungarian section of South Stream, Gazprom CEO, Aleksey Miller, said the Russian gas giant will create a joint venture with Hungary by May 15, adding that Gazprom will run operate the $13 Billion project which is due to begin operation at the end of 2015.
“The 50/50 joint venture will be created by 15 of May. Gazprom will be the holder of all the gas sent through the Hungarian section of South Stream. The pipeline will begin operations before 31 of December 2015”.
Gazprom also signed an agreement with Hungarian energy company, Mol Nyrt, to build a 1.3 Billion Cubic Metre gas storage facility in Hungary – enough to hold 1/10th of Hungary’s annual energy consumption.
The announcements come as Gazprom becomes more focused on the need to bypass Ukraine in supplying energy to Europe, with Prime Minister Vladimir Putin declaring that “Europe doesn’t have a problem with sources of energy. There are problems with transit countries”.
The South Stream project will see construction of a 900 klm pipeline under the Black Sea to Bulgaria and then across the Balkans.