Gazprom creates Hungarian South Stream arm

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BUDAPEST, Hungary, Feb. 1 (UPI) -- Russian gas giant Gazprom created a joint venture for the Hungarian leg of the South Stream gas pipeline during a ceremony in Budapest, the company said.

Viktor Zubkov, the Russian deputy prime minister, met Hungarian Prime Minister Gordon Bajnai at a ceremony in Budapest to sign incorporation documents for Hungary Zrt, a joint venture for the South Stream natural gas pipeline in Hungary.

"For all the participants of the South Stream project the entry of Hungary into this large-scale joint endeavor is a markedly important development," said Alexander Medvedev, the deputy chairman of the Gazprom management committee.

The 50-50 joint venture with MFB-Hungarian Development Bank is tasked with conducting the feasibility study for the Hungarian leg of South Stream.

Russia aims to diversify its transit options to Europe with South Stream. The project is designed to carry as much as 2.2 trillion cubic feet of natural gas each year through the Balkans and on to southern Europe.

The route for South Stream remains unsettled, however, as officials in Serbia bicker over the route for the 280-mile South Stream leg through their country.

Gazprom in January established a special project management department to oversee developments of South Stream. Deliveries through the pipeline are expected by 2015.