Hungary Lured into AGRI Natural Gas Pipeline Project

Energy | February 14, 2011, Monday // 20:13|  views

The AGRI project has grown to include Hungary and a gas transit pipeline from Constanta to Hungary with a capacity of 8 billion cubic meters per year, one-fourth that of Nabucco. Map by

Hungary has joined the Azerbaijan-Georgia-Romania-Interconnection (AGRI) liquefied natural gas project, which is to build a pipeline to Central Europe.

Azerbaijan, Georgia, Hungary and Romania signed "A Joint Declaration" on the Azerbaijan-Georgia-Romanian Interconnector (AGRI) project in Bucharest on Monday, under which Hungary has become its full member, the Georgian Energy Ministry told the Baku-based Trend news agency.

The ministerial was attended by Romanian Minister of Economics, Trade and Business Environment Ion Ariton, Azerbaijani Industry and Energy Minister Natig Aliyev and Hungarian National Development Minister Tamas Fellig, as well as companies, project partners - SOCAR (Azerbaijan), GOGC (Georgia), MVM (Hungary) and "Romgas" (Romania).

The document signed Monday in Bucharest specifies the need to finalize the feasibility study on the AGRI project no later than April 1, 2012. It outlines the shortest route of delivery of Azerbaijani gas to European markets, i.e. the creation of Interconnector Romania - Hungary (Arad-Szeged).

The Azerbaijan-Georgia-Romania-Interconnection liquefied natural gas project will between EUR 2 B and EUR 5 B, according to Azerbaijan's Energy Minister Natig Aliyev.

The two LNG terminals planned for the project could supply as much as 8 billion cubic meters of gas, Aliyev said today after a meeting in Bucharest with shareholders of the project known as AGRI. MVM Rt., Hungary's electricity producer and distributor, will enter the project by the end of the month, AGRI Chairman Corneliu Condrea also said.

"The final cost of the project will depend on the volumes of gas transported," Aliyev said as cited y Bloomberg. "We need one year to prepare all the works including the feasibility study and if we combine the financing scheme, then the construction of the elements could take from 1 year to 2 years."

Aliyev said that Azerbaijan plans to increase its gas output to 60 billion cubic meters from 30 billion cubic meters, enabling it to supply both AGRI and the planned Nabucco pipeline.

"Azerbaijan supports all southern gas corridors, including AGRI, and that's why we are now in a position to provide these projects with natural gas," Aliyev said. "We are looking for new markets."

The three countries in the project, as well as Hungary, agreed in September to form the venture to secure LNG supplies to central European customers from the Caspian Sea as Romania has proven to be much more insightful and successful than Bulgaria, which has also made half-hearted attempts to subscribe Azerbaijan and Georgia to a similar liquefied natural gas deal.

While Bulgaria's talks with the two Southern Caucasus states to secure natural gas supplies are technically continuing, it is nowhere near the achievement of its northern neighbor Romania, which is not just going to receive LNG from them but will also become a transit country.

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Tags: azerbaijan, natural gas, Georgia, Nabucco, gas transit, Black Sea, liquefied natural gas, SOCAR, MVM, Romania, Constanta, LNG, Hungary, gas transit pipeline


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