Russia and Hungary to set up joint venture for South Stream project

Mar 10, 2009 01:00 AM

Russia and Hungary will set up a joint venture to build the Hungarian stretch of the South Stream gas pipeline.
The basic agreement on cooperation is to be signed by Gazprom and the Hungarian bank of development. The document envisions the setting up of such a joint venture and the necessary infrastructure of the South Stream gas pipeline, Russian Prime Minister Vladimir Putin said during the expanded intergovernmental Russian-Hungarian consultations in Moscow.

Putin also said a large underground gas storage will be built in Hungary.
South Stream is originally a Russian-Italian gas pipeline project running along the bed of the Black Sea from Novorossiysk to the Bulgarian port of Varna. The length of the Black Sea part of the pipeline is some 900 km; the maximum depth is more than 2 km.

From Bulgaria, two branches of the pipeline will run through the Balkan peninsula to Italy and Austria. It is planned to complete the project by 2013.
Hungary officially joined the project in late February, 2009. At that time, Hungarian Prime Minister Ferenc Gyurcsany came to Moscow for signing an inter-governmental agreement. Taking part in the project is Serbia.

Vladimir Putin has said two-way trade since Ferenc Gyurcsany took the post of prime minister has increased by nine times. In 2008, it reached a record high of $ 13 bn, with Russia's becoming Hungary's second largest trade partner after Germany. Putin noted that these results had been made possible thanks to the mechanism of inter-governmental consultations.
"A good practice has developed, which is being implemented quite successfully and effectively," Putin said.

The same mechanism operates in relations between Russia and Germany, France, China and other countries.
For his part, Ferenc Gyurcsany underlined that within the EU framework, Hungary represents the point of view according to which relations with Russia should be built in the vein of strategic partnership, based on systematic dialogue.

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