Hungarian Minister of National Development Makes Case for South Stream's Value and Economic Benefit for Europe

Hungarian Minister of National Development Makes Case for South Stream's Value
                       and Economic Benefit for Europe

  PR Newswire

  BUDAPEST, Hungary, November 19, 2013

BUDAPEST, Hungary, November 19, 2013 /PRNewswire/ --

With the attendance of both Russian and Hungarian government members alongside
Gazprom representatives and energy experts, today's conference entitled "South
Stream: The Evolution of a Pipeline" discussed the importance of the pipeline
in terms of economic stimulation, security of supply, diversification of
energy sources and its role in the development of a strong partnership between
the energy enterprises of Europe.

Opening the conference was Hungarian Minister of National Development, Zsuzsa
Nemeth, who reiterated Hungary's need for energy diversification and
emphasized that South Stream would create a strategic partnership with
neighbouring countries. "South Stream is a unique initiative with strong
political backing from all sides. It provides an excellent tool for
diversification amongst these countries and contributes to energy security in
the whole region."

Nemeth further stressed that "Russia is a strategic partner to Hungary on
security issues and we are a major market for Russian gas. Hungary has
confirmed its support for the construction of South Stream and the pipeline
will further contribute to Southern and Eastern European countries relations
with Russia."

The Secretary of State for Energy Affairs, Pal Kovacs, underlined Hungary's
energy dependence which currently stands to be greater than 60%. He
highlighted the lack of infrastructure and a need for a survival strategy for
the country which would address these issues. Kovacs insisted, "We need a
strategy which will focus on promoting energy efficiency and improvement of
energy infrastructure as well as security of supply. We need to ensure access
to natural gas and that is something that South Stream will guarantee by

"Russia is the third largest partner for the EU," said Russia's Deputy
Minister of Energy, Anatoly Yanovsky. "We need to consider the past problems
and differences between the EU and Russia on energy policy, but in Russia,
energy assets have been privatised and the oil and gas industry has
transformed- energy infrastructure is booming. Russia's strategy till 2050
will be a mechanism based on a continuous monitoring process and we need to be
forward-looking and make recommendations for a series of steps to enhance
Russia-EU energy cooperation over the coming decades."

He added that negotiations between the EU and Russia will ensure a solution to
the problems raised by the Third Energy Package, which has been seen as a
roadblock to the commencement of construction.

South Stream, which is to run 2385 km long and will involve the partnership of
8 countries, including Bulgaria, Serbia, Hungary, Italy, Slovenia, Croatia,
Bosnia Herzegovina and Russia, has required substantial agreements between
governments and major energy enterprises. Russia is the most important
commercial energy partner for Europe and has always represented a sure, stable
supply of gas for many European countries, with Gazprom supplying over a
quarter of the European market. Analysts predict that the gas demand will
increase from 312 billion cubic metres to 537 billion cubic metres over the
next fifteen years.

"Natural gas today represents the most important source of energy in the
European Union," explained Alexander Syromyatin, Deputy Head of Project
Management Department, Gazprom. "Demand in the near future will quickly
overtake supply, because of the falling extraction capacity in Europe. The
South Stream project will solve the problem of this deficit for the future."

Gyorgy Harmati, Strategic Director and Chairman of the Board South Stream
Hungary (MVM), highlighted the key benefits of South Stream, which would
include profitable investment and that the pipeline will determine the
regional market in the future:

"All the market players must adapt to the changing environment - this
infrastructure project is Hungary's answer. We must enable gas delivery
wherever it is soundly possible. South Stream is aimed to start construction
in 2015 and this will be going ahead." MVM is on path to increase its role on
the gas market, and Hungarian storages are ideal for servicing shippers.

Closing the conference Jose Maria Aznar, former Spanish Prime Minister,
analysed the social and economic impacts of the South Stream pipeline and
further reiterated the project's influence and importance in regards to EU
integration in the context of helping provide Europe with a new source of
desperately needed economic growth.

Other speakers included Dragutin Matanovic, Advisor to Serbia's Prime
Minister, Adnan Vatansever, Senior lecturer, King's College London, Ben
Shimshon, Director of World Thinks, RImma Subhankulova, Founder of World
Energy Expert Group, Andrak Deak, Director of the Hungarian Institute of
International Affairs, and Gyorgy Drucker, chief analyst at
amongst others.

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