Hungary could build South Stream Pipeline under new bill

Energy Trade

Hungary could start building its own segment of the South Stream Pipeline, despite the EU objection to the project, under an amended bill proposed by Antal Rogán, the head of the ruling Fidesz party’s parliamentary group, news portal reported today.  

The amendment makes it possible for any gas company that is not a certified transmission system operator to build a gas pipeline

The only requirement that the pipeline construction company would need is approval of the Hungarian Energy Office. In this case, international co-ordination bodies would have no jurisdiction. The proposal does not specify an exact pipeline construction project, but the only such project on the agenda right now is South Stream pipeline, which would go under the Black Sea and allow Russia to ship natural gas to Europe while bypassing Ukraine.


The EC has expressed concerns over Gazprom’s domination of the EU gas market. There were also worriers that it put Ukraine in a vulnerable position; Russia would have the option of switching off gas supplies to the country without causing any inconvenience to other European countries. Europe’s criticism only intensified after Russia annexed Crimea.


The EC insists that other gas suppliers should have access to South Stream. But Gazprom has refused to comply with the demand. Gazprom controls 50% of the entire planned South Stream project. This violates Europe's Third Energy Package, which states that the pipelines in the EU cannot belong to the natural gas extractors, so as not to distort competition.


The EU has been pressuring its member states to suspend construction of the project until all legal issues are resolved, and even non-member Serbia has complied. Hungary, however has been eager to cooperate with Gazprom on this project.

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