Russian concern Gazprom struck Monday an agreement with oil and gas company OMV on the construction of Austria's stretch of the South Stream gas pipeline.

The agreement was signed on Tuesday, the day of a visit by Russian President Vladimir Putin to Vienna where he meets Austrian counterpart Heinz Fischer.

OMV CEO Gerhard Roiss, who signed the document alongside Gazprom's Alexey Miller, defended the South Stream project which has sparked controversy in Europe and has prompted legal actions by the EU Commission against Bulgaria over non-compliance with common rules.

"The project is compatible with European law," business daily Handelsblatt quoted Roiss as saying.

Another daily, Austrian Die Presse, also reports the pipeline is "an investment into Europe's security of energy supplies".

In early June the EU Commission demanded that Bulgaria, the country via which South Stream is due to enter the EU, freeze the project until it meets the bloc's competition and energy liberalization requirements.

Sofia heeded Brussels' calls, but made clear construction activities could be halted only from the Bulgarian side, and even South Stream Bulgaria (managing the country's South Stream section) is a joint venture involving both Bulgaria and Russia.

Europe is also concerned about the fact that Gazprom is both gas supplier and in charge of access to the pipeline, under bilateral agreements it signs on the issue.

Gazprom officials say building of South Stream is to be competed in schedule regardless of EU measures.

It is expected to be ready by 2017 and to pump some 32 billion cubic meters into Austria, delivering roughly the same quantity to other countries on its way.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!