MVM's long-term strategy unaffected by scrapped South Stream plan

Energy Trade

Russia's decision to scrap plans to build the South Stream pipeline will not affect the long-term strategy of the state-owned Hungarian Electricity Works (MVM), György Harmati, the company's strategy chief said at a conference yesterday.

Harmati conceded that the pipeline would have supported the direct utilization of Hungary's gas storage facilities, noting that Gazprom already stores some of its gas in Hungary. MVM is the equal partner in a joint venture with Russia's Gazprom established to build the stretch of the pipeline that would have passed through Hungary.

The JV, called South Stream Hungary, had total assets of HUF 3.9 bln at the end of 2013, public records show. But MVM decided to raise capital in the company by HUF 5 bln in autumn of this year. The South Stream pipeline was to deliver Russian gas to Europe via the Black Sea, bypassing Ukraine. From 2016, the pipeline was set to deliver about 30 billion cubic meters of gas a year across Hungary. Russian President Vladimir Putin said on Monday that the project was being scrapped because of opposition in Europe.

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