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06:19 GMT +3 hours21 December 2014
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Gazprom, Hungary to set up South Stream pipeline's Hungarian leg

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Russian energy giant Gazprom and the Hungarian MFB bank signed on Friday an agreement to set up a joint venture to build the South Stream gas pipeline in Hungary.

Russian energy giant Gazprom and the Hungarian MFB bank signed on Friday an agreement to set up a joint venture to build the South Stream gas pipeline in Hungary.

The documents establishing the South Stream Hungary Zrt were signed in Budapest in the presence of Russian First Deputy Prime Minister Viktor Zubkov, who also heads the Gazprom board of directors, and Hungarian Prime Minister Gordon Bajnai.

Gazprom and MFB will hold equal stakes in the joint company designed to draft a feasibility study, finance, build and operate the Hungarian leg of South Stream.

South Stream, to be laid on the Black Sea floor and run through Bulgaria, Serbia, Hungary, Italy and Greece, is a rival project to the EU-backed Nabucco pipeline, which would bypass Russia.

"We have no doubt that South Stream will provide additional guarantees of safety and flexibility of Russian natural gas supplies to European markets," said Gazprom Deputy CEO Alexander Medvedev.

MFB CEO Janos Eros described the gas pipeline project as "significant to Hungary and, presumably, all of Europe."

Zubkov praised the advance made in bilateral Russian-Hungarian energy cooperation, and said another project to build an underground storage facility for over 1 billion cubic meters of natural gas in Hungary was also progressing quickly.

The Russian government official also pointed to good prospects of bilateral partnership in nuclear energy backed up by what he described as "positive experience" of the two countries' joint efforts to upgrade the Paks nuclear power plant, Hungary's only operating NPP.

MOSCOW, January 29 (RIA Novosti)