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Russian gas

hf/gb/kj, AP/Reuters
May 16, 2009

Russian natural gas giant Gazprom has signed deals with companies from four European nations, paving the way for a new natural gas pipeline that sidesteps the Ukraine and worries Brussels.

The South Stream pipeline's path from Russia, under the Black Sea, through Bulgaria, Greece, Italy, Serbia, Hungary, Slovakia and Austria
The South Stream pipeline would bypass the Ukraine to bring gas to EuropeImage: San Jose / Patrol110

Russian natural gas monopoly Gazprom has reached deals with Italian, Bulgarian, Greek and Serbian energy companies to push its South Stream pipeline forward and double its capacity. The Kremlin-backed project is intended to deliver Russian natural gas to Europe, but the European Union isn't sure it's interested.

Both Moscow and Brussels are looking for new ways to feed Europe's hunger for fuel. Bitter price battles between Russia and its gas transport partner Ukraine have led to disruptions of gas supplies to Europe, including during two cold weeks this past January.

The South Stream is just one of two pipelines planned by Russia to deliver gas to Europe, while avoiding Ukraine's pipeline network. The Nord Stream pipeline would deliver gas from Russia directly to Germany through the Baltic Sea.

EU seeking independent solutions

In a Jan. 8, 2009 file photo a worker moves a valve of a gas pipeline in a gas storage plant in Gronau, western Germany, near the Dutch border.
In January, Germany's gas reserves sank dangerously lowImage: AP

However, Russia has often been accused of using its gas reserves as a political weapon. European customers rely on Russia for one quarter of their natural gas. Tired of this dependence, the EU is looking to diversify its gas suppliers by backing the Nabucco pipeline, which would move gas westward from Central Asia, bypassing both Russia and Ukraine.

But Gazprom isn't convinced the EU's project is about money at all.

“Activities around Nabucco are being initiated by politicians, often from across the Atlantic, because it is a political, not an economic project,” Gazprom said in a statement.

As of yet, the Nabucco pipeline still doesn't have guarantees from Central Asian governments that it will have enough gas to fill it.

But with the new signed deals, Russian gas is scheduled to begin flowing through the South Stream pipeline, under the Black Sea to Bulgaria and then on to Europe, by late 2015. Gazprom still needs to reach deals with Austria and Slovenia.