Budapesthosted yesterday a working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Viktor Orban, Prime Minister of Hungary.

The parties addressed a wide range of cooperation issues in the gas sector, placing special emphasis on the South Stream project.

It was noted that the project was progressing as per schedule and the gas pipeline construction was ongoing in Russia, Bulgaria and Serbia.

The South Stream Hungary Zrt joint project company and an international consortium of project companies signed a contract for design and survey activities as well as spatial planning and environmental impact assessment for the Hungarian section of the South Stream gas pipeline. In the first quarter of 2014 it is expected to complete the technical part of the design documentation for determining a route for the Hungarian section. The talks confirmed that the construction of South Stream's Hungarian section would start in April 2015 and the first gas would come to Hungary in early 2017.

Alexey Miller and Viktor Orban stressed the importance of South Stream for developing the Hungarian gas transmission sector and economy, as well as for enhancing European energy security.

Background

The South Stream gas pipeline is Gazprom's global infrastructure project aimed at constructing a gas pipeline with a capacity of 63 billion cubic meters to Southern and Central Europe for the purpose of diversifying the natural gas export routes and eliminating transit risks.

A 2,400-kilometer gas pipeline will run under the Black Sea from the Russian coast to Bulgaria and will cross Serbia, Hungary and Slovenia to end up in Italy. Gas branches from the main pipeline route will be built to Croatia and to Republika Srpska (the state formation within Bosnia and Herzegovina).

The South Stream construction in Hungary is executed on the basis of the Intergovernmental Agreement between Russia and Hungary. South Stream was granted the status of a national significance project in Hungary.

In January 2010 the South Stream Hungary Zrt joint project company (JPC) was set up to build the Hungarian section of South Stream. The JPC shareholdings are split on a parity basis between Gazprom and MVM Zrt (Hungarian Power Companies).

The final investment decision to construct a 229-kilometer section of South Stream and one compressor station in Hungary was taken in October 2012.

In March 2013 Gazprom and MVM Zrt approved the Action Plan regarding the implementation of the South Stream project in Hungary until 2017.

In 2012 Hungary was supplied with 5.3 billion cubic meters of Russian natural gas.