Russia's Putin wins approval for gas pipeline to EU

By Gleb Bryanski

NOVO-OGARYOVO, Russia (Reuters) - Russian Prime Minister Vladimir Putin won Slovenia's approval on Saturday for the South Stream pipeline, undermining European Union efforts to reduce dependency on Russian gas supplies.

The seal of approval is the latest victory for the Kremlin as it seeks to counter the long delayed Nabucco pipeline which is backed by the European Union as a way to curb dependency on Russia by pumping gas from the Caspian and the Middle East.

Slovenia's approval brings the South Stream pipeline a step closer to being built, though its backers -- Russian gas behemoth Gazprom and Italy's Eni SpA -- still have to raise billions of dollars to finance the project.

"We have now signed deals with all the European partners needed for this project to be completed," Putin told reporters at his Novo-Ogaryovo residency outside Moscow after signing the cooperation deal with Slovenian counterpart Borut Pahor.

Slovenia is the fifth country to sign such an agreement with Russia on the South Sea pipeline, which will skirt Ukraine and cross Bulgaria, Serbia, Hungary, Greece, Slovenia to Italy.

With a capacity of 63 billion cubic metres a year, the pipeline is expected to cost between 19 billion and 24 billion euros ($28 billion to $36 billion). It is due to become operational in 2015.

"Thanks to Slovenia's participation, Russian natural gas will reach the Italian border, the main target market for the (South Stream) project," a Russian government source, who requested anonymity, told reporters.