Austria backs South Stream pipeline

Pipeline politics: Austria endorses Gazprom-led South Stream despite Ukraine crisis

Austria has said it remains committed to the Gazprom-led South Stream pipeline project despite the crisis in Ukraine.

Speaking to reporters in Luxembourg, Foreign Minister Sebastian Kurze said “we need not only more suppliers, but also more variety in the routes that energy can flow to us," noting that five EU member states firmly backed the project, according to Reuters reports.

South Stream is designed to pipe 63 billion cubic metres of gas per year from Russia to central and southern Europe while bypassing Ukraine.

The proposed pipeline runs offshore from the Russian sector of the Black Sea to Bulgaria and then onshore via Greece, Serbia, Hungary, Croatia, Slovenia and Italy before terminating at Baumgarten in Austria.

The minister’s comments come a day before Russian President Vladimir Putin is due to visit Vienna and OMV and Gazprom are due to sign on the dotted line for the Austrian section of the line, which was initially agreed in April.

OMV chief executive Gerhard Roiss earlier told Austria’s WirtschaftsBlatt newspaper he favoured accelerated negotiations to approve the pipeline, arguing it was unrealistic to think Europe could entirely wean itself off of Russian energy supplies.

"A third of our gas comes from Russia, in some regions even 100%," and in return Europe sends cars and machinery to Russia, Roiss said.

"One should not make this economic integration into a political football, because our economy and prosperity are based on it," he said.

"If we can get large quantities of gas from a certain region then we have to give investors the chance to build gas highways. Negotiations for South Stream should thus be accelerated and not put on ice," Roiss said, while acknowledging that the project would have to conform to European law.

Earlier this month, EU member state Bulgaria made a surprise decision to suspend all work on its section of the pipeline after a visiting US delegation warned Bulgarian companies could face sanctions if it did not halt the project.

Sofia had initially resisted earlier calls from Brussels to stop the pipeline both over political considerations given the crisis in Ukraine and concerns that the tenders for the project were not awarded in accordance with EU competition rules.

Serbia has said it is sticking with the project.

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