The Gazprom headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company's Management Committee and Tamas Fellegi, Minister of National Development of Hungary.

The meeting participants addressed the current issues of the Russian-Hungarian cooperation in the gas sector. Special attention was paid to the South Stream project implementation, Russian natural gas supplies to Hungary and transit to third countries.

Alexey Miller and Tamas Fellegi expressed a unanimous opinion that South Stream would significantly promote the regional cooperation in Southeastern Europe.

Background

Russian natural gas supplies to Hungary were launched in 1975. In 2010 the country was supplied with nearly 6.93 billion cubic meters of gas by Gazprom export. Gazprom transits natural gas via Hungary to Serbia and Bosnia and Herzegovina.

For the purpose of diversifying natural gas export routes Gazprom is planning to construct a gas pipeline across the Black Sea to South European and Central European countries – the South Stream project.

Intergovernmental agreements were signed with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria in order to implement the onshore gas pipeline section.

At present, the South Stream Consolidated Feasibility Study is being finalized including the feasibility study for the offshore section and feasibility studies for the respective gas pipelines in host countries of Southern and Central Europe.

On January 18, 2008 the special purpose entity South Stream AG was registered in Switzerland by Gazprom and Eni on a parity basis.

In February 2008 Russia and Hungary signed the Intergovernmental Agreement stipulating Hungary's entry into the South Stream gas transmission system project.

On March 10, 2009 Gazprom and MFB signed the Basic Agreement of Cooperation to construct a gas pipeline and transit natural gas through the Republic of Hungary as part of the South Stream project. The agreement sets the principles of cooperation between the parties during the pre-investment and subsequent stages of the project, along with the terms governing the creation and functioning of a Joint Engineering Company.

On January 29, 2010 Gazprom and MFB established the Joint Project Company South Stream Hungary Zrt. The company is responsible for the development of a feasibility study for the Hungarian segment of South Stream as well as funding, building and operating the gas pipeline in Hungary.

MFB is Hungarian Development Bank engaged in financing major projects that are contributing to the development of the Hungarian economy.