Hungary has officially joined the $US 10 billion South Stream gas project, during Prime Minister Ferenc Gyurcsany`s visit to Moscow. He met Vladimir Putin and signed the gas pipeline deal. South Stream will eventually supply 20% of Europe`s gas.
The pipeline will run under the Black Sea, through Bulgaria, Serbia and now Hungary – delivering 30 billion cubic metres of Russian gas to Western Europe. It's a joint venture between Russia's Gazprom and Italy's ENI. Due to be completed in 2013, the $US 10 billion venture promises to benefit all involved. Hungary will receive gas transit fees and a host of other benefits. “If this project is accomplished – and I have no reason for any doubts – the role and significance of Hungary as an important element of the European energy sector will increase, and supplies to Hungary will become more and more reliable,” Putin said. But still, the project is a sore spot for the EU, which is concerned by its growing dependency on Russian gas. Europe also fears that the South Stream would rule out the need for a similar project – the Nabucco pipeline, which would bypass Russia. Hungary says the two projects don't cancel each other out, but the country's Prime Minister did admit it's something of a balancing act. “Concerning the energy issues, we’re trying to keep two irons in the fire. We’d like to see more competition. We are concerned about the European energy market. At the same time, I believe what's happening in the energy sector in Europe is not a market, but rather multilateral co-operation. You are quicker than the Nabucco project in this sense,” Gyurcsany said. President Putin said, “The South Stream project is not a rival of Nabucco”. “Our project is absolutely realistic. And what is most important, fully provided with resources. If anyone wants to dig a hole and burry iron pipes – they are free to do that. We won’t make any objection,” he added. Serbia was the most recent player to jump on board the ambitious project. It will also receive money for gas transit and construct an underground gas storage facility with a capacity of 300 million cubic metres. The deal was signed by Presidential candidate, Russia's First Deputy Prime Minister and Gazprom’s Chairman, Dmitry Medvedev, during a visit to Belgrade last week. “I'm sure such agreements will bring dividends for both countries. It also benefits the interests of Russia and Serbia and forms the foundation for the energy security of a unified Europe,” Medvedev said.