• Natural Gas News

    South Stream in Hungary: No Coincidence



At South Stream: The Evolution of a Pipeline, Top Hungarian and international stakeholders involved in the building of South Stream ponder what it will mean for Hungary.

by: Drew Leifheit

Posted in:

Natural Gas & LNG News, News By Country, Hungary, Pipelines, South Stream Pipeline, Top Stories

South Stream in Hungary: No Coincidence

Hosting a full capacity crowd of delegates at the Four Seasons Gresham Palota, South Stream: The Evolution of a Pipeline in Budapest, Hungary featured presentations from top Hungarian and international stakeholders involved in the building of South Stream as well as international analysts who opined what the pipeline could mean for countries in Central and Eastern Europe.

The Budapest leg of the conference was opened by Hungary's Minister of National Development Ms. Zsuzsa Németh. Noting that the conference series had been in several countries – Slovenia, Italy, Serbia and Bulgaria - before Hungary, Minister Németh said that it was no coincidence.

“The explanation is self explanatory as to what is common in the previously mentioned countries,” she said, explaining that countries in Central and Eastern Europe had been affected by gas transit disputes between Russia and Ukraine.

“The answer is, we all have uncomfortable memories of the problems of 2006 and 2009 problems with the gas supplies and the crisis related to this. During those crises we were able to experience what difficulties we have in terms of security of supply and restricted infrastructure connections. Just like other countries in Central and Eastern Europe, Hungary also has a high risk in terms of temporary disruption and supply in transportation – therefore, the Hungarian has a firm stake in changing this situation,” she explained.

Minister Németh said the National Energy Strategy enacted by Hungary's parliament supported all initiatives that contributed to the diversification of transport routes and possibilities.

“In order to achieve this goal, we consider neighboring countries as strategic partners involved in the implementation.”

South Stream, she noted, was a unique initiative in that it had very strong political backing and the commitment of the participating companies. “The project provides an excellent tool for diversification of natural gas transportation by which a connection can be established among these countries and contributes to an increase of security of supply in the whole region.”

Not only did Hungary consider the pipeline itself of importance, but the investment would contribute to mitigating the economic crisis through increases in GDP and employment; according to the Minister, difficulties regarding South Stream could be overcome and environmental requirements could be met through the transfer and sharing of technology.

“I would like to emphasize that Russia is a special strategic partner to Hungary in energy issues,” she explained. “The impact of the economic crisis can be seen in foreign trade relations, yet Hungary is one of the major markets for Russian gas. This contributes to the fact that primary Hungarian energy consumption relies 40% on natural gas, because of the high dependence of households.

Climate change, she added, could be abated through an important tool such as natural gas, which would connect the market structures of the present and the future.

However, she stated: “Hungary continues searching for new, innovative solutions by which natural gas can accompany other sectors, such as community transport and long-distance transportation routes. These are just two major fields where state of the art natural gas facilities can contribute to viable economic achievement.”

South Stream's preparations in Hungary, she reported, had made good progress and was supported by the Hungarian government. “In order to accelerate implementation the government has declaired such projects to be of highest importance for the national economy.”

She added that the Hungarian electricity trust “MVM” had been designated the strategic partner for implementation of the pipeline in Hungary, which had re confirmed its commitment to the construction of South Stream.

“However, as a member state of the European Union we also have to meet the common energy policy requirements. It is my conviction that with our common efforts and setting up of a working group, we will manage to find a solution that is both technically and economically viable.

“I think South Stream can contribute to the South and Central Eastern European countries' relations to Russia, a very strong connection historically. It can be re-vitalized. We are trying to overcome the difficulties in this project and elaborate a solution which is good for all partners, setting up a very close partnership among all of the stakeholders,” concluded Hungary's Minister of National Development Ms. Zsuzsa Németh.