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Putin mocks US-backed gas pipeline project
MOSCOW
Petroleumworld.com, Feb 29, 2008President Vladimir Putin on Thursday mocked a US-backed plan to build a gas pipeline to Europe that would bypass Russia as he concluded a deal with Hungary on a rival project.
"There's always an alternative but it's worse than cooperation with Russia. You can build two pipelines, you can build three. The question is what you pump through them," Putin told reporters after the agreement was signed.
"It's very clear that the project we are proposing can be realised and has supplies guaranteed. If someone wants to dig up the ground and build a pipeline -- go ahead, we don't mind," he said.
Putin was referring to Nabucco, a plan supported by the European Union and the United States to build a pipeline from gas-rich ex-Soviet Central Asian states to Europe via Turkey and thereby skirting Russia.
Russia's own plan to build a pipeline under the Black Sea to Bulgaria and on towards Austria and Italy got a further boost on Thursday when Hungary became the latest country after Bulgaria and Serbia to sign up to the project.
The signature came despite a senior US official warning Budapest against going ahead with the South Stream project, which is to be developed by Russian gas monopoly Gazprom and Italian energy giant ENI.
Russia holds a quarter of the world's known gas reserves and the European Union relies on Russia for about a quarter of its supplies -- a proportion that would increase when Moscow's Nord Stream and South Stream projects are built.
Welcoming Hungarian Prime Minister Ferenc Gyurcsany in the Kremlin, Putin said South Stream would boost "Hungary's significance as an important link for energy supplies to Europe and Hungary's own energy security."
Gyurcsany told Putin at the start of talks: "You were faster than Nabucco."
After the signing ceremony, Gyurcsany appeared to back the Nabucco project as well, saying: "Two pipelines are better than one. I would be happy if there were three. Three is even better than two."
The jokey comment was understood by Putin as a referrence to Nabucco, South Stream and Nord Stream, another planned pipeline which would run from Russia under the Baltic Sea to northern Germany.
On Thursday, US Assistant Secretary of State Daniel Fried warned Hungary's leaders to resist Russian pressure to abandon the Nabucco project.
"Moscow has responded to the advance of the Nabucco project by exerting pressure on Hungary and its neighbours to strike a quick deal on South Stream," Fried said in an article published in the Hungarian newspaper Nepszabadsag.
"We know very little about the negotiations which led to this outcome."
Chris Weafer, analyst at Moscow-based Uralsib bank, said South Stream "is a pipeline that was not really planned to be done that quickly. It's a direct result of the European Union having announced plans to build Nabucco.
Meanwhile in Budapest, the MTI news agency said the prime minister had decided to appoint a roving ambassador to maintain links with the countries building the Nabucco project.
"With the South Stream deal done, Hungary can now concentrate more energy on the Nabucco project," government spokesman David Daroczi was quoted as saying in an MTI report from Moscow.Daroczi added that President Putin understood Hungary's position.
The Kremlin meanwhile heaped praise on Hungary, implicitly contrasting Budapest's friendly position with that of Western critics who worry about Moscow's energy might.A Kremlin statement said that "as a member of the European Union and NATO, Hungary is pursuing a pragmatic course in the international arena and enhancing its reputation as a predictable and reliable partner."
Putin said growing cooperation was due to "changes in the political climate between our two countries" while Gyurcsany said relations were "less about ideology and more about pragmatism."
Story by Dario Thuburn from AFP
AFP 282007 GMT 02 08Copyright© 2007 Petroleumworld. All rights reserved.
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