TurkStream Pipeline Operator Moves to Hungary, Secures U.S. Sanctions Exemption
The operator of the TurkStream gas pipeline will move its headquarters from the Netherlands to Hungary under a deal ensuring gas deliveries to southern Europe continue despite sanctions on Russian energy.
(Reuters) — The TurkStream pipeline operator will be able to conduct business without issues after relocating its base from the Netherlands to Hungary, bypassing sanctions on Russian energy due to an agreement with the U.S., Hungary's Foreign Minister Peter Szijjarto said on Tuesday.
The gas pipeline's operator South Stream Transport B.V., a subsidiary of Kremlin-controlled Gazprom, has faced litigation in its current base in the Netherlands over Russia's actions in Ukraine.
Gazprom did not respond to a request for comment.
Hungary has continued to rely on Russian energy despite the ongoing conflict in Ukraine and related Western sanctions, prompting criticism from several European Union and NATO allies.
"With the operating company's relocation from the Netherlands to Hungary, the TurkStream pipeline will be able to operate without disruption in the coming period despite any legal and financial attacks," Szijjarto said in Moscow during a briefing broadcast on his Facebook page.
Pipeline Allows Moscow to Bypass Ukraine
Russia and Turkey formally launched the TurkStream pipeline, which has a capacity of 31.5 billion cubic meters per year, in January 2020. The pipeline allows Moscow to bypass Ukraine as a transit route to Europe and carries Russian natural gas to southern Europe through the Black Sea and Turkey.
The agreement ensures that transactions related to the movement of Russian natural gas via TurkStream will not be affected by U.S. sanctions, he said.
Last month, the United States granted Hungary a one-year exemption from U.S. sanctions over its use of Russian oil and gas after Hungarian Prime Minister Viktor Orban pressed his case for a reprieve during a meeting with President Donald Trump in Washington.
Orban met separately with Russian President Vladimir Putin in Moscow last month, saying the visit was "to ensure Hungary’s energy supply is secured for the winter and next year."