Vladimir Putin goes to the land of Strauss and schnitzel

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Vladimir Putin, who is going to Austria on April 24-25, will meet with Chancellor Werner Faymann and President Heinz Fischer only after attending the European judo championships in Vienna

Vladimir Putin, who is going to Austria on April 24-25, will meet with Chancellor Werner Faymann and President Heinz Fischer only after attending the European judo championships in Vienna.

This is logical, as the black-belted Russian prime minister is honorary president of the European Judo Union.

But the highlight of his visit will be the planned signing of an agreement on Austria's entry into the South Stream project on April 25. The project is a joint venture between Russia's Gazprom, Italy's Eni and Elictricite de France (EdF) to transport Russian natural gas across the Black Sea to Bulgaria and further to Italy and Austria.

The agreement with Austria should complete the international formalities necessary to start building the pipeline. Russia has already signed similar agreements with Bulgaria, Hungary, Greece, Serbia, Slovenia and Croatia, and Romania appears to be ready to join the project too.

Austria is the main gas dispatcher for central, eastern and southern Europe; its gas distribution station in Baumgarten on the border with Slovakia handles over 30% of Russian natural gas exports, or approximately 40 billion cubic meters, annually. When it joins South Stream, it will become Europe's largest gas hub.

The pipeline is to go along the Black Sea bed before splitting into two lines, one going to Austria and the other to Italy. The 900-km (559-mile) underwater part of the pipeline will be laid at a depth of 2 km from the Beregovaya compressor station in Russia to Bulgaria.

When it reaches its designed capacity in 2015, it will be able to transship 63 billion cubic meters annually.

Austria imports 87% of its gas and oil requirements. Russia accounts for 47% of its gas imports, 37% comes from Austria's own reserves and about 9% from Norway.

Russia's Gazprom owns 3% of OMV, Austria's largest energy company.

Vienna is a perfect place for thinking about Russian-European gas friendship, its bright future and the benefits of all parties involved. In fact, Russia has always had a special relationship with Austria, the land of Strauss, strudel and schnitzel.

Austria was the first European country to sign a gas supply agreement with the Soviet Union in 1968, and has never filed any complaints since then. The only exception was January 2009, when Ukraine stopped gas supply to Europe in an attempt to prove its transit indispensability.

South Stream will bypass Ukraine and hence ensure uninterrupted gas supply to Europe.

Since 1968, Russia has shipped over 160 billion cubic meters of natural gas to Austria. Vladimir Putin, then president of Russia, went to Vienna in 2006 for the signing of strategic agreements on the annual supply of 7 billion cubic meters of Russian gas until 2027. Austria is the only country in Europe to have signed such a long-term gas supply agreement with Russia.

It is now doing its best to adhere to the pan-European policy of energy independence from Russia. It is an ardent advocate of Nabucco, an alternative pipeline to South Stream and Blue Stream designed to deliver gas from Turkmenistan, Azerbaijan and Iran.

The problem with Nabucco is that it may be short of gas, whereas South Stream is an almost solid reality. If Russia and Austria sign an agreement during Putin's visit, this will be a big victory for Russia and a major blow to Nabucco.

However, Russia should make an attractive offer to Austria to convince it to sign the agreement.

Austria has been worried by imbalances in mutual trade, which is currently worth only $5 billion, although Russian exports of energy and raw materials to Austria have grown considerably.

Russian exports to Austria grew nearly 72% in January 2010, while imports from Austria fell 28%.

Austria would like Russia to change this imbalance, which means that Russia will have to make an attractive compensation offer to ensure Austria's agreement to join South Stream.

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

MOSCOW. (RIA Novosti political commentator Andrei Fedyashin)

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