Prime Minister Gordon Bajnai of Hungary, First Deputy Prime Minister Viktor Zubkov of Russia and Hungary's Minister of Finance Peter Oszko were present during the signing of the agreement.

    Mr Zubkov said at a press conference following the meeting of the committee that the agreement between MFB and Gazprom represented an important step in organizational preparations for the construction of Hungary's section of the South Stream pipeline.

    The governments of Hungary and Russia signed an agreement on Hungary's involvement in the South Stream project on February 28, 2008. One year later, on March 10, 2009, MFB and Gazprom signed a cooperation agreement with the view to establish a 50-50pc Hungarian-Russian joint venture for the Hungarian section of the South Stream pipeline.

    The company -- the statutes of which have been signed on Friday -- will have registered capital of HUF 5m and maintain its headquarters in Budapest, and its brief is to organise the preparation of the feasibility studies, and finance, construct and operate the pipeline section in Hungary.

    The agreement also prohibits MFB, Gazprom and their subsidiaries from participating in other projects aimed at transporting gas to markets in southern Europe.

    Both MFB and Gazprom will delegate two members to the joint venture's four-member board, whose president will rotate on a 12-month basis.