South Stream to extend to Hungary

Published on September 17, 2007

Budapest

Gyurcsány told a subsequent press conference that Hungary has only a single supplier of gas via only one pipeline, therefore it seeks alternative solutions such as the Nabucco project initiated by the EU and the Russian-Italian South Stream project. An agreement under which a strategic gas reservoir with storage capacity of 10 billion cubic metres could be built in Hungary as part of the project. He added that Italian Prime Minister Romano Prodi had approached Hungary about the South Stream plan before it was announced.

MOL unveils plan for regional integration of gas pipelines

December 6, 2007

MOL has proposed the creation of an independent integrated gas transmission company in South East Europe to unify 27,000km of gas pipelines linking seven countries. The company would be set up under joint ownership and management. Gas transmission companies in Slovenia, Croatia, Bosnia-Hercegovina, Serbia, Romania, Bulgaria and Austria have agreed to take part in discussions, MOL said, adding that the project is open to other regional companies. Negotiations on the legal background of the project could last up to two years, with a further two years to deal with technical issues, MOL said, as the plan would require the approval of several governments.The company proposed by MOL would be responsible for connecting the national gas pipelines of participating countries and carrying out new investments. Given the large scale of the project, finding appropriate financing would become easier, analysts observed. MOL chief economist László Varró said the new company could be listed on a stock market, probably in London.

Another question is how Russian gas behemoth Gazprom will react to the proposal, said analysts. Overall, industry experts described the initiative as a step forward for strengthening MOL’s regional presence.

Austria’s OMV said MOL’s announcement shows the need for the consolidation of energy markets in the region, adding that a merger of the two companies would be the most effective way to guarantee security of supply. OMV said it will evaluate the proposal.

The European Commission welcomed MOL’s initiative, saying it could lead to more competition in the market and enhance the security of supply.

Hungary fully behind Nabucco pipeline

September 17, 2007

Prime Minister Ferenc Gyurcsány supported Hungary’s participation in the Nabucco gas pipeline project – which would link Central Asia to Western Europe – in a conference on the matter in Budapest on Friday. Energy Affairs Commissioner Andreas Piebalgs__ ex-pects that the nomination of EU co-ordinator Jozias van Aastrsen to oversee the project will speed up the implementation of the con-struction of the pipeline.

The government was previously accused of favouring the Russian-backed Blue Stream network after Gyurcsány referred to the Nabucco as “a pipe-dream.” In his opening speech, Gyurcsány confirmed “Hungary’s to-tal support for the EU in its efforts to integrate its gas supply,” but emphasised that several new gas pipelines would be necessary to supply the continent’s future energy needs. “It would be foolish for a country to be happy with only a single supply source,” he re-marked.

MOL chairman Zsolt Hernádi also stressed the need of diversification of gas resources and the creation of new routes from the East to South Europe, as well as the need to establish LNG terminals. The Euro-pean Union’s Energy Commissioner Andris Piebalgs said “Europe must open towards the Caspian region, which holds some of the world’s largest gas reserves.” Construction of the 3,300km Nabucco pipeline is set to start in 2009 and is scheduled to be fully operating by 2012. The projected cost of its construc-tion is calculated at some €4.6 billion, and the pipeline would have an annual transport capacity of 30 billion m3 of gas.

Nabucco’s shareholders include Hun-gary’s MOL, Botas of Turkey, Romania’s Transgaz, Bulgaria’s Bulgagaz and Austrian firm OMV. The consortium has been holding talks with Germany’s RWE and France’s Gaz de France to become the sixth partner.