2010-01-20

The Hungarian Development Bank (MFB) and Gazprom on 12 January in Budapest signed documents establishing the company which will manage the Hungarian section of the planned South Stream pipeline. Through this Hungary has joined the group of countries which have entered into agreements as part of the project at the level of companies. However, Budapest will not withdraw from participation in the EU’s gas pipeline project Nabucco, the implementation of which will be one of the priorities for the new right-wing Hungarian government after the parliamentary elections this spring.

The company South Stream Hungary was established less than a year after Gazprom and the Hungarian state-controlled MFB struck a deal in March 2009 to set up a joint venture to be put in charge of the construction and management of the section of the gas pipeline running through Hungary. Each of the parties will have equal representation at the company, where the principle of management rotation will apply. As an effect of the company being established, preparations for the South Stream’s implementation in Hungary are now more advanced that in other countries through whose territories the pipeline is planned to run (Bulgaria, Greece, Serbia, Austria and Slovenia).
The right-wing party Fidesz is expected to win the upcoming parliamentary elections and to form a new government in Hungary. Therefore, it can be expected that the Nabucco project, South Stream’s competitor, will become a priority issue for Budapest. The implementation of Nabucco will be treated by the new government as a high priority project, which will ensure energy security to Hungary. However, it is possible that the new government could withdraw completely from participation in the Russian undertaking for pragmatic reasons. <boc>

Permalink