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Hungary unaffected by Russian cut to Ukrainian gas

Business Materials 3 March 2008 16:34 (UTC +04:00)

( dpa ) - Russia's decision to reduce gas deliveries to Ukraine has not caused any disruption in Hungary, the Hungarian gas-delivery firm Foldgazszallito said on Monday.

Russia's Gazprom said it had cut gas to Ukraine by 25 per cent on Monday due to Ukraine's debts and lack of an agreement on supplies for the rest of the year.

Hungary, which receives around 80 per cent of its gas through the Ukrainian pipeline, was among the European countries worst affected by gas outages in January 2006, which occurred when Russian deliveries through Ukraine were disrupted after a pricing dispute.

The Ukrainian pipeline is Hungary's only source of foreign gas, and since the incident Hungary has been attempting to diversify supplies.

However, Prime Minister Ferenc Gyurcsany's decision last week to sign up to Russia's South Stream pipeline caused controversy.

The pipeline is seen as a direct competitor to the European-Union backed Nabucco, which aims to reduce Europe's reliance on Russian gas by bringing in Central Asian and Middle Eastern gas through Turkey.

Opposition parties and US officials called on Hungary to ensure the decision did not affect its support for the Nabucco pipeline, but most analysts viewed the decision as a blow to the EU's plans.

However, Gyurcsany said the new pipeline was necessary to reduce the risk of external disputes cutting Hungary's gas supplies.

The Hungarian arm of the South Stream pipeline is expected to supply around 10 billion cubic metres per year - around two-thirds of Hungary's needs.

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