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Russia tries to involve Germany in South Stream to weaken Nabucco - paper

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The possible participation of a strong German partner in the Russian-Italian South Stream gas pipeline project could undermine the rival Nabucco pipeline, Kommersant business daily said on Wednesday.

The possible participation of a strong German partner in the Russian-Italian South Stream gas pipeline project could undermine the rival Nabucco pipeline, Kommersant business daily said on Wednesday.

On Tuesday, German RWE gas concern officially announced it had received a proposal from Russian gas giant Gazprom to join the South Stream project.

"RWE will consider this proposal as it would any other," the company's press service said.

Russian Prime Minister Vladimir Putin can sense that Nabucco is gathering pace and is trying to prevent it by any means, Mikhail Kortchemkin of the U.S. East European Gas Analysis think tank said.

The 3,300 kilometer Nabucco pipleline (capacity of 31 billion cubic meters) will transport Central Asian gas to Europe through Turkey, Bulgaria, Romania, Hungary and Austria, bypassing Russia, while the South Stream pipeline (63 billion cubic meters) will carry gas across the Black Sea to Bulgaria.

"The South Stream is an international project and the more international it is, the less interesting its rival will be for consumers," a senior Russian official told Kommersant.

RWE is a leading partner in the Nabucco project. The project has concluded a gas contract with Turkey and is currently holding talks on gas exportation with Iran and Iraq.

The Nabucco project will be seriously weakened if RWE decides to jump ship and join South Stream since Germany is the end point of the Nabucco pipeline, Graham Freedman, a senior analyst from the London-based Wood Mackenzie gas consulting said.

Gazprom could try to lure RWE by proposing participation in Russian oil extraction projects, Korchemkin said. Putin could even make substantive price concessions, he added.

European experts believe the two projects could merge into one because they follow similar paths and aim at supplying the same consumers.

"Everything points in the direction of oversupply in the European market," said Georg Zachmann from the Bruegel Brussels-based thing tank.

 

MOSCOW, July 14 (RIA Novosti)

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