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Hungary set to sign natural gas pipeline deal with Russia

Hungary set to sign natural gas pipeline deal with Russia

Hungary's government on Thursday is set to sign an agreement joining a natural gas pipeline project anchored by Russia _ amid calls at home for greater transparency in the deal and worries about Russia's growing influence.
Prime Minister Ferenc Gyurcsany was in Moscow on Thursday to sign the deal with Gazprom, Russia's natural gas monopoly, on a joint venture to build the Hungarian section of the South Stream gas pipeline. The pipeline would bring Russian gas under the Black Sea to Bulgaria before splitting into several branches to Western Europe.
In Hungary, concerns about the deal have been voiced not just by Fidesz, the main center-right opposition group, but also by the Alliance of Free Democrats, the coalition partners of Gyurcsany's Socialist Party.
Fidesz described Monday's accord as a "coup-like agreement" and called on Gyurcsany to refrain from signing the document which would have "long-term effects on Hungary's fate."
Russia has been making similar deals with other countries in the region, including Serbia and Bulgaria, and it also has deals for gas shipments with Western European countries like Italy and Germany.
The European Union is working on its own gas pipeline plan, Nabucco, which seeks to diversify the EU's gas supplies and would at least partly rely on gas sources in Azerbaijan.
Gyurcsany and Russian First Deputy Prime Minister Dmitry Medvedev, who is Gazprom's chairman and is expected to soon become his country's next president, hammered out the final details of the agreement in Budapest on Monday.
The main objections of the Free Democrats centered on how the South Stream deal would affect Nabucco and about what party members said was the lack of transparency regarding the details of the agreement.
A Fidesz request for an extraordinary parliamentary session to debate the deal and learn its details was rejected by the coalition parties, which noted that the government did not need lawmakers' approval to sign international contracts.
Opposition in Hungary _ and in Bulgaria _ follows the historical East-West divide, with Fidesz trying to foster improved relations with the United States while Gyurcsany's Socialists push for stronger links with Russia.
In an article published Thursday in the Hungarian daily Nepszabadsag, U.S. Deputy Secretary of State Daniel Fried urged Hungary to put Nabucco first.
"Now is not the time for our attention to be diverted by South Stream, a pipeline that will be at least three times more expensive than Nabucco, and that is designed by a monopolist to stifle competition," Fried said.
Fried added that Gazprom's South Stream seemed designed to block the implementation of Nabucco and that the Gazprom deal would fail to provide Hungary with a real alternative gas source.
Hungary already gets around two-thirds of its gas from Russia.
But experts said Gazprom had now gained the upper hand against Nabucco.
"The momentum is really with the South Stream pipeline now," said Andrew Neff, an energy analyst with Global Insight in Ankara, Turkey.
While South Stream and Nabucco could be complementary, "the onus is really going to be on the EU, because we may see some of the commercial support for Nabucco evaporate" as the South Stream project goes forward, Neff said.
The EU has seen efforts to coordinate the political and commercial sides of Nabucco slowed by having to deal simultaneously with the many countries and interests in the 27-member bloc, a complication Russia and Gazprom do not have.
"Gazprom's strategy is to have bilateral agreements with each country separately," said Gergely Boszormenyi Nagy, an analyst at the Perspective Institute in Budapest. "This is one of the most important obstacles to the development of a common EU energy policy, which Russia is knowingly using."
(pg)


Updated : 2021-01-22 17:47 GMT+08:00