Hungary ratifies Nabucco agreement

With a unanimous vote in Parliament last night, Hungary has been the first to ratify an international treaty signed on July 13 in Ankara to launch the Nabucco natural gas pipeline project. With no "nay" votes and only one MP abstaining from the vote, plans to launch the project enjoy broad support in both the government and opposition parties.

Hungarian MPs passed a decisive vote on the Nabucco gas pipeline yesterday, with 334 representatives in favour of the project and only one MP abstaining from the vote.

Extensively covered by Porfolio.hu, Nabucco is the joint initiative of 5 countries with a territorial interest in the project (Austria, Hungary, Romania, Bulgaria and Turkey), which signed an agreement to regulate the legal framework for the construction and operation of the new gas pipeline that will bypass Russia and Ukraine. Mihály Bayer, Hungary’s Ambassador-at-Large to the Nabucco commission, described the agreement in July as a "landmark" for the project.

Subsequent to yesterday’s parliamentary approval, Hungary will be required to sign several bilateral agreements in support of the project to ensure that the international consortium that will be set up to build the pipeline complies with Hungary’s legal environment including taxation, environmental issues and property rights.

Once complete, Nabucco will be used to supply natural gas from the Caspian basin to Europe, bypassing Russian territory. The 3,300-kilometre pipeline will boast 31 billion cubic metres per annum transport capacity from Ezurum in Turkey via Bulgaria, Romania and Hungary to Baumgarten, Austria. The estimated cost is EUR 7.9 billion, with the first segment scheduled for completion in 2014.

The region’s leading energy companies set up a consortium to build and operate the pipeline, including Austria’s OMV, Hungary’s MOL, Romania’s Transgas, Bulgaria’s BEH, Turkey’s Botas, and Germany’s RWE Group, which joined the consortium at a later stage.

Recent news have mentioned the possibility that French energy group GDF Suez may also join the consortium, which has been welcomed by OMV and RWE in a joint statement and is also approved by MOL.