Croatia joins Russia-led South Stream gas link

MOSCOW, March 2 Tue Mar 2, 2010 4:06pm GMT

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MOSCOW, March 2 (Reuters) - Croatia on Tuesday joined the Moscow-backed South Stream gas pipeline project aimed at bringing Russian gas into Europe south of its existing routes, which cross Ukraine. Moscow is planning two new gas pipelines into Europe, Nord Stream and South Stream, which both bypass Ukraine, and the Croatian deal comes just days before Ukraine's new leader visits Moscow.

"The advantages of the South Stream implementation are obvious to everyone including Croatia, which joined (the project) today," said Russian Prime Minister Vladimir Putin after the agreement was signed in Moscow.

Croatian Prime Minister Jadranka Kosor added that the signed document anticipates the creation of a joint venture.

The European Union candidate country consumes some 3.2 billion cubic metres of gas annually and covers some 60 percent from its own resources. The remaining 40 percent is imported from Russia.

Russia has already signed an agreement on the South Stream pipeline with five countries -- Bulgaria, Serbia, Hungary, Greece and Slovenia.

The Russian gas giant Gazprom (GAZP.MM) and the Italian energy group ENI (ENI.MI) are key partners in the project to build a gas pipeline under the Black Sea to supply gas to southern Europe.

The project is seen as strategically important by European countries keen to ensure the security of supplies of Russian gas by bypassing former Soviet satellite states where there have been energy supply disputes with Moscow.

A pricing row between Moscow and Kiev at the start of last year disrupted gas supplies to a number of European countries, including Croatia.

New Ukrainian President Viktor Yanukovich is scheduled to visit Moscow later this week. On Monday in Brussels, he promised the European Union he would keep Ukraine on the reform path and ensure it is a reliable transit route for Russian gas supplies. (Reporting by Dasha Korsunskaya; Writing by Vladimir Soldatkin; Editing by Greg Mahlich)

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