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Gazprom, Hungary Talk Natural Gas Supply, South Stream in Budapest

Gazprom, Hungary Talk Natural Gas Supply, South Stream in Budapest

Hungary and Russian natural gas firm OAO Gazprom GAZP.RS -3.54% on Monday discussed natural gas supplies for Hungary this winter and the planned construction of a natural gas pipeline dubbed South Stream as Budapest appears to be unharmed by the shortage of Russian gas some countries experienced amid the separatist conflict in Ukraine.

Hungary’s Prime Minister Viktor Orban, who earlier this year signed up for a Russian nuclear reactor along with Russian financing, met on Monday with Gazprom’s CEO Alexei Miller.

Unlike some European Union member countries, particularly in Central Europe, Russia hasn’t cut its natural gas exports to Hungary. Russia is the only gas exporter to Hungary. In 2013, the volume of Russian gas supplies to Hungary amounted to about 6 billion cubic meters.

Hungary’s storage facilities were 56% full earlier this month, at 3.3 billion cubic meters, and gas is still being pumped into storage, data state power firm MVM Zrt. and the Hungarian Energy and Public Utility Regulatory Authority show.

Out of Hungary’s 3.9 million inhabited households, 45% are heated with natural gas only.

With South Stream, planned to run from Russia to the Bulgarian Black Sea port of Varna before extending overland through Bulgaria, Serbia, Hungary and Slovenia, will supply gas to Western Europe via Italy and Austria. The new pipeline will allow Gazprom to reduce the role Ukraine plans in transit to Europe.

The pipeline’s capacity will amount to 63 billion cubic meters but the construction could still be hampered by the European Commission, which has yet to approve the contracts of six EU countries that have struck inter-governmental agreements with Russia on building South Stream.

Bulgaria, Hungary, Greece, Slovenia, Croatia and Austria must amend their agreements to comply with the bloc’s laws, in particular opening up the pipeline to Gazprom’s competition.

Hungary will choose the designer for its section of the gas pipeline by the end of October, Gazprom said in the statement.

Read More:Gazprom, Hungary Talk Natural Gas Supply, South Stream in Budapest – Emerging Europe Real Time – WSJ.

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