Russia won Hungarian support on Tuesday for its South Stream pipeline to deliver gas to Europe, while Prime Minister Vladimir Putin said a rival project to supply Caspian region gas would need Iran’s support.

Russian gas export monopoly Gazprom signed a deal with state-owned Hungarian Development Bank to build part of the South Stream pipeline, a 10 billion euro (Dh26.6 billion) project that would bypass Ukraine in delivering gas to Europe.

Moscow supports the project, saying it would lower the risk of supply disruptions similar to those that followed its dispute with Ukraine over gas payment in January.

Russia, supplier of a quarter of Europe’s gas, and some customers in Europe want to accelerate the construction of gas supply routes to bypass Ukraine. Some consumers are also eyeing alternatives that would cut dependence on Russian gas.

Putin, announcing the deal after a meeting with Hungarian Prime Minister Ferenc Gyurcsany, told reporters Russia had sufficient gas reserves to meet its own growing demand and that of Europe for about 100 years.

He said the rival Nabucco project, which would bypass Russia in pumping up to 31 billion cubic metres of gas from the Caspian Sea region to Europe, would not be possible “without the participation of Iran in the project.”

Nabucco has so far received scant financial commitment and has only a fifth of the gas commitments needed to be viable.

Iran, as well as ex-Soviet states Turkmenistan and Uzbekistan, is a potential supplier of gas to the pipeline, but the standoff between Washington and Tehran over Iran’s nuclear programme makes this awkward for Nabucco’s European backers.

Hungary’s prime minister said the country was interested in diversifying its energy sources.

“Hungary is not interested in there being one gas pipeline or one oil pipeline,” Gyurcsany told reporters.

(Reuters & Gulf News)