Pipelines, railway to dominate Russia-Austria talks

MOSCOW, Nov 11 (Reuters) - Russia's South Stream project to supply gas to Europe will top the agenda in talks on Wednesday between Prime Minister Vladimir Putin and the chancellor of Austria, home to the lead company in a rival pipeline project.

Putin's spokesman said the Russian prime minister would also discuss the possible extension to Austria of a major oil export route, the Druzhba pipeline, when he meets with Austrian Chancellor Werner Faymann in Moscow.

The spokesman, Dmitry Peskov, said Putin and Faymann would also discuss construction of a broad-gauge railway linking Russia, Ukraine, Slovakia and Austria.

The South Stream project, backed by Russian gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research) and Italian energy major Eni SpA (ENI.MI: Quote, Profile, Research), is designed to deliver Russian gas to Europe along a pipeline that would bypass Ukraine. [ID:nLF362831] It would involve the participation of several European states across which the pipeline would run to a planned Western terminus in Austria.

Russian Energy Minister Sergei Shmatko said in May that Russia was close to a deal with Austria [ID:nLM658579], which has ties with Gazprom. The rival Nabucco pipeline project, however, is led by an Austrian energy company, OMV (OMVV.VI: Quote, Profile, Research). This project is backed by the European Union as a means to curb the bloc's dependency on Russia by pumping gas from the Caspian and Middle East.

Many experts see the projects as rivals, although Putin said in August that the pipelines were not mutually exclusive.

Peskov said Austrian Airlines AUAV.VI was not on the agenda for the talks between Putin and Faymann.

Russian business daily Kommersant reported on Wednesday that Austrian Airlines might lose its right to operate in Russia after the company was acquired by Lufthansa (LHAG.DE: Quote, Profile, Research) and lost its status as Austria's national operator. (Reporting by Gleb Bryanski; editing by Sue Thomas)