Brussels might seriously frown when the Hungarian section of South Stream is built as Moscow’s endeavors and the relevant European Union rules contradict in several aspects – that was among the issues discussed at a recent conference in Budapest.

“The European Union does not seem to be actively seeking a solution to that problem,” Pál Kovács, state secretary for energy at the Hungarian Ministry of National Development, said. He added that Brussels is attempting to put pressure on the countries concerned (Hungary, Italy, Slovenia, Romania and Bulgaria) by holding out the possibility of launching infringement proceedings.

Under Community law, in the territory of the European Union, access should always be granted to third parties. That however does not serve Gazprom’s interests. That having said, the project is being implemented as planned, which means construction of the Hungarian section may begin next year.

Envisaged to have an annual full capacity of 63 billion cubic meters, the pipeline is to start supplying Hungary with natural gas in 2017. According to the plan, Hungary will get an additional 4 to 6 billion cubic meters of gas. (In 2012 Hungary used 10.3 billion cubic meters of gas.)

So that South Stream – which bypasses Ukraine – could reliably operate, Gazprom will need storage facilities. For the time being Gazprom only has such facilities in Serbia along the route of the pipeline.

Responding to a question of this daily, Alexandr Siromyatyin, deputy head of the South Stream project, said that they reckon also with Hungarian storage facilities. For that reason they consider it a welcome development that in late September MVM [electricity wholesaler] bought them from E.ON. [electric utility service provider] After all, that Hungarian state-owned company is their strategic partner.

Siromyatyin added that the Hungarian storage facilities of a capacity of 4.2 billion cubic meters would be attractive for them only if Gazprom could become a co-owner. No offer has arrived from MVM yet, he said. His statement is surprising because MVM has repeatedly indicated that it does not intend to sell its newly acquired facilities.

Speaking at that conference Zsuzsanna Németh, Hungary’s minister of national development, confirmed that the contracting parties concerned had confirmed their commitment to South Stream. Németh stressed that natural gas continues to be a crucial source of energy in coming decades and it will be a link between energy solutions of today and the future. She expects South Stream to have a favorable impact on the Hungarian domestic labor market and other aspects of the domestic economy to compensate for the negative effects of the crisis.

Source: Magyar Nemzet

Translated by Budapest Telegraph