Szijjártó: South Stream's dead, we need new plan

Energy Trade

Hungary needs to find new sources to ensure the security of its energy supplies for the long term, Foreign Minister Péter Szijjártó told Hungarian news agency MTI today, in reaction to Russia's dropping plans for the South Stream gas pipeline project. Russia is now apparently considering a pipeline through Turkey instead.

The Hungarian government backed Russia's South Stream gas pipeline despite European and U.S. opposition, because it saw the project is the only way to ensure energy supply, a senior Hungarian government official told Reuters on November 20. Both national and internatioal media suggested over the past months that Hungary was turning its back to the EU with its positioning. The piplines would have allowed Russia to send gas through Europe and bypass Ukraine. The EU had opposed the pipeline because it would have been completely controlled by one company, Russia's gas monopoly Gazprom.

In the end, Russia apparently gave in to EU pressure.

"Russia had the right to make that decision and Hungary has acknowledged the move," Szijjártó said.

Gazprom CEO Alexei Miller, said yesterday that the project to build the South Stream gas pipeline was dead, after President Vladimir Putin cited obstacles raised by the European Union. “The project is closed. This is it,” Miller was quoted as telling reporters.

The planned $40 billion Gazprom-led pipeline was supposed to cross the Black Sea to Southern Europe, and had been intended to start supplying gas next year. Speaking at a joint news conference with Turkish President Tayyip Erdogan, Putin said on Monday the European Commission was reluctant to give the green light to the South Stream project. He said Russia was potentially ready to build a gas hub on the Turkish-Greek border to supply Europe with gas to compensate for the loss of South Stream.

Putin also said Russia would reduce the gas price for Turkey by 6%, starting next year, and had agreed to supply Turkey with an additional 3 billion cubic meters. Last year, 13.7 bcm of gas were pumped to Turkey via the existing Blue Stream pipeline.

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