Slovenia signs up to Russia-Europe gas pipeline

Slovenia signed an agreement on Saturday for the massive South Stream gas pipeline from Russia to Europe to pass through the country.

Prime Minister Borut Pahor and his Russian counterpart Vladimir Putin witnessed the accord signed by their respective energy ministers Matej Lahovnik and Sergei Shmatko at Putin's residence at Novo-Ogarevo near Moscow.

"We have now signed agreements with all the European partners which are vital for the South Stream project," Putin said at a joint press conference afterwards.

Slovenia follows Bulgaria, Serbia, Hungary and Greece in signing up to South Stream.

"We wanted to sign before our relations suffered because of our team's victory," Pahor joked, referring to the crucial football World Cup qualifier between Slovenia and Russia taking place later Saturday.

The 20-billion-euro (30-billion-dollar) pipeline should be completed by 2015 and will run under the Black Sea to Bulgaria, Serbia and Hungary before branching out to western Europe.

Its total capacity could reach 63 billion cubic metres (2.2 trillion cubic feet) a year.

The section through Slovenia, with an annual capacity of some 10 billion cubic metres, will be constructed by a company co-owned by Russia's gas giant Gazprom and Slovenia's gas distributor Geoplin Plinovodi.

South Stream is one of two major pipeline projects that Russia is developing, aimed at consolidating its commanding position in supplies of gas to Europe.

The other, Nord Stream, is planned to run under the Baltic Sea from Russia to Germany.

Sweden and Finland gave permission on November 5 for Nord Stream to pass through their waters, which followed an agreement with Denmark on October 20 over the project.

The projects could free the European Union of the risks posed by disputes between Russia and Ukraine, through which 80 percent of Russian gas currently passes on its way to Europe.

At the start of January, Russian gas was cut off to countries across Europe in the depths of winter because of a gas dispute between Russia and Ukraine.

One quarter of all gas consumed in Europe comes from Russia and a rival project, Nabucco, backed by the EU, is aimed at reducing this dependence by routing supplies from Caspian Sea countries including Azerbaijan and Turkmenistan.

Valery Nesterov, an analyst at Troika Dialog investment bank, said South Stream was "more favourable and profitable" for Europe than for Russia, as "Gazprom is taking on most of the financial burden."