Hungary and Serbia are affected countries

7 december 2014 | RBC-TV

This week Russia shut one of the most ambitious and significant energy-related project. “Gazprom” will not develop “South Stream” project – the EU authorities resisted for too long. The pipeline will go through Turkey. Concerned European nations blamed Brussels, prime minister of Hungary openly accused the EU of the project breakdown. But it is possible that now Moscow will deal with problems directly with Budapest and Belgrade.

Alexander Kurdin
Alexander Kurdin
Department for Fuel and Energy Sector

About the new era of energy relations with the EU the Head of the Department for Strategic Studies in Energy of the Analytical Center Alexander Kurdin spoke live on RBC-TV.

“Hungary and Serbia are affected countries. Hungary, unlike any other country in Central Europe, has no gas source, that is why supply diversification issue is pressing for them. The Hungarians are anxious about the South Stream project and their own gas storage facilities organization for a reason. The Serbians are also in a difficult situation as they can get Russian gas through Hungary only, and they are also anxious about investments built-in pipelines construction, which account for $1.5 billiard (the country’s GDP falls short of $5 billiard). The loss is colossal, and it may have a significant impact on countries’ relations.

Why has Russia decided to sell gas to the EU on the border line? “The controversy surrounding the South Stream project was related to the question wherein gas would be sold. The “Gazprom” business model was in the idea that the company owns pipelines  and gas, as it works in Russia. The EU could not agree on that and this conceptual problem could not be solved”, said Mr. Kurdin.  Recently a decision was passed that the pipeline will be constructed with the help of “Gazprom”, and then the EU acts on its own. “The EU still claims that for the project work Russia should put up with the fact that the project should be subject to the Third Energy Package rates and that a gas producer cannot be a pipeline owner.  For Russia and “Gazprom” this is unacceptable, that’s why “Gazprom” says that they will reach the borderline with Greece where they can use their  model and then the EU deals with the problem by obeying its own rules.