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    Energy set to take the spotlight in Putin visit to Hungary

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    MOSCOW, February 28 (RIA Novosti) - Energy is expected to dominate a historic two-day visit to Hungary made by Vladimir Putin, which begins Tuesday.

    During talks with the country's leadership, Putin, the first Russian leader to visit the country in 13 years, will discuss the modernization of a nuclear power plant and Russian oil and gas supplies, as well as proposals to refit the largely Soviet-era Budapest subway.

    Presidential aide Sergei Prikhodko said the Russian leadership was set to support the country's business plans to bid for investment projects in Hungary, which like many former Soviet-bloc countries became a member of the European Union in 2004.

    "This in particular concerns Russian companies' efforts to modernize the Paks nuclear power plant, and to expand and renovate the subway in Budapest and produce cars for it," Prikhodko said, adding that bilateral trade had exceeded a record of $6 billion in 2005.

    The Federal Agency for Nuclear Power said Russia was prepared to modernize four power units of the Soviet-built plant to extend the service life of Paks, which produces more than 40% of the country's electricity, for another two decades.

    Russia's TVEL corporation, which with 17% of the global market is one of the world's largest producers of nuclear fuel, said Paks ran on Russian-made fuel. Under an agreement between the Russian and Hungarian governments and a 2004 contract between TVEL and Paks, the Russian producer is to supply nuclear fuel to the plant until its service life expires, which would be scheduled to happen between 2013 and 2017 if no extension program were put into place.

    Away from energy, the Russian Economic Development and Trade Ministry also said that the Russian consortium of metro constructors had won a tender to build the first station in a project to modernize a subway line and carry out tunnel work. The Russian contract will be worth about $70-80 million out of the overall $210-220 million in the first stage of the fourth line of the Budapest subway. The entire line is set to cost well over a billion dollars.

    Another Russian company, Metrovagonmash, is bidding to produce about 200 new subway cars worth about $250 million for the city. Experts say the chances to win the tender are high, as Budapest has been using Soviet-made cars for about 30 years.

    However, Prikhodko said trade with Hungary remained dominated by oil and gas supplies.

    "Russian energy supplies to Hungary in accordance with the current long-term contracts and ambitious joint projects in the oil and gas sector will be high on the agenda," Prikhodko said, adding that Budapest saw Russia as a strategic oil and gas supplier.

    Hungary is the leading consumer of Russian natural gas in central and eastern Europe. Since 1975, when the supplies began, the country has received about 164 billion cubic meters of Russian gas totaling roughly 80% of Hungarian gas imports.

    Under a contract with Russian natural gas monopoly Gazprom, Hungary will be provided with up to 10 billion cu m of gas every year until 2015.

    Hungary is also the transit country for Russian gas designated for Bosnia, Serbia and Montenegro, with the transit close on 2.4 billion cu m in 2005.

    Russia is the leading oil importer for Hungary. LUKoil, Russia's no.1 independent crude producer, delivered about 6.4 million metric tons of oil (128,500 bbl/d) in 2005. The company also owns a chain of gasoline stations in the country.

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