Russia, Slovenia to sign South Stream pipe deal

Official: Slovenia premier lands in Moscow to sign South Stream gas pipeline project

By David Nowak, Associated Press Writer

MOSCOW (AP) -- Slovenia will agree Saturday to take part in a pipeline project carrying Russian natural gas to Europe, bolstering a Kremlin attempt to defend its position as the continent's primary supplier, a Russian official said.

Europe imports a quarter of its natural gas from Russia, and the Kremlin sees the South Stream network, scheduled to come online in 2015, as a way to defend against an alternative, Western-backed supply route that bypasses Russia.

Russia presented South Stream in 2007 as an alternative route around Ukraine and Belarus, which it is portrayed as unreliable partners.

South Stream -- funded by Russia's Gazprom and Italy Eni state companies -- exits Russia under the Black Sea and enters the European Union via Bulgaria.

A branch heads northwest through Serbia, Hungary and Austria, while an offshoot channels gas west through Greece and into southern Italy under the Adriatic Sea. Of those countries only Austria, a firm supporter of the rival Nabucco pipeline has not signed up to the Russian project -- though it is in negotiations.

Putin spokesman Dmitry Peskov said the Slovenia deal will be signed Saturday by Slovenia Prime Minister Borut Pahor and Russian counterpart Vladimir Putin. It would take gas through Slovenia and to northern Italy.

Nabucco, also scheduled for 2015, would deliver gas from the Caspian Sea region westward via the Caucasus, bypassing Russia, and into Bulgaria via Turkey. That route would decrease dependence on existing Russian supplies to Europe, which some see as unreliable. Payment disputes between Moscow and transit country Ukraine led to two-week shutoffs and severe gas shortages in many European countries last January. Russian officials have said they fear renewed shutoffs this winter.

Slovenia's Economics Minister Matej Lahovnik has said that the shortages prompted the country to seal the deal.

The company constructing the Slovenian section of South Stream will be a joint venture of the Slovenian gas pipeline operator Geoplin Plinovodi and Russia's Gazprom.

Lahovnik has said that despite joining the South Stream, Slovenia -- an EU member -- remains supporter of Nabucco.

Austrian Chancellor Werner Faymann said at a Moscow meeting with Putin on Wednesday that South Stream represented "diversification as well as a chance to make the energy supply more secure."

A Russian sister project, Nord Stream, is planned to supply Germany directly with Russian gas via a pipeline under the Baltic Sea, and should start pumping in the next few years.