Russian gas giant Gazprom and Hungarian major MOL have signed an agreement in Budapest to work together on a project to deliver gas to Europe via an extended Blue Stream pipeline.
Although few concrete details are available as to the precise routing of a new gas transport network for southern Europe, Gazprom has already dubbed the agreement as signifying a ‘south European gas pipeline’, echoing its controversial project to build a gas export route under the Baltic sea, known as the north European gas pipeline.
It is a question of creating a new gas transportation system for supplies to European markets, with gas not only of Russian origin, but also from third countries, Gazprom spokesman Sergei Kuprianov said in a statement.
The gas transport corridor ‘Blue Stream’, which passes under the Black Sea, is intended to be used to implement the project, he added.
Hungarian officials believe that construction of an extended Blue Stream line would make its gas supply more secure, as well as allowing it to invest in more gas storage infrastructure and act as a local gas hub for the southeast European area.
Secure access to gas supplies is a strategic imperative for Hungary given its near-unique status in the central and eastern European region: Datamonitor research shows that Hungary has a very high level of gas penetration, far in excess of its neighbors and even ahead of many much more developed gas markets.
Hungary’s indigenous gas production has traditionally supplied a small, but important, proportion of gas demand. However, since a peak in production was reached in 1986, the subsequent decline means that as demand continues to grow, a greater role will need to be played by imports, Datamonitor’s research says.