Russia and Austria discuss South Stream pipeline

MOSCOW - Prime Minister Vladimir Putin on Wednesday sought to strengthen Russia's role as a top energy supplier to Europe by asking Austria to join the South Stream natural gas pipeline project.

Austria has been its staunch backer of Nabucco, a rival pipeline project that has European Union and U.S. support and would provide a supply of gas not subject to Russian control.

Putin said after talks with Austrian Chancellor Werner Faymann that they agreed to draft an agreement on cooperation in South Stream.

"The Chancellor and I have shared the opinion that the agreement should be drafted as soon as possible," Putin told reporters.

Faymann said South Stream is in Austria's interests and that Austria's government had given a mandate to start negotiations two weeks ago. He said Nabucco and South Stream shouldn't be viewed seen as competitors:

"We believe that this is diversification as well as a chance to make the energy supply more secure," Faymann said.

Nabucco would deliver gas from the Caspian Sea region westward via the Caucasus, bypassing Russia. It would decrease dependence on existing and planned Russian pipelines to Europe, which gets about one-quarter of its gas from Russia.

EU concerns about reliance on Russia for energy deepened after a two-week shutdown of Russian gas supplies to Ukraine last January led to severe shortages in several European countries.

South Stream is one of two ambitious pipeline projects Russia is promoting in a bid to bypass economically struggling, politically turbulent Ukraine, as well as Belarus.

Putin on Wednesday raised the possibility of more supply disruptions this winter, saying that Russia will only provide Ukraine with gas if it pays for deliveries. He said he hoped South Stream and other new pipeline projects would "prompt our transit partners to be more disciplined."

Putin and Faymann also discussed other economic issues, including a dispute over a deal on Austrian Airlines flights to Russia. Russia agreed to extend the current agreement until Feb. 1 to give the parties time to work out a new deal, Putin said.

Russia's Transport Ministry earlier said it might strip Austrian Airlines of national air carrier status after the company was acquired by Germany's Lufthansa.

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