Bulgaria could collect between USD 250 M and USD 400 M a year in transit fees on the South Stream gas pipeline from Russia to the EU, the country's outgoing Economy and Energy Minister Rumen Ovcharov said on Monday.

By joining the project, Bulgaria would become a strategic partner to both Europe and Russia, as the pipeline is envisioned to carry 300 billion cubic metres of gas annually, the minister emphasised.

Italian energy company Eni SpA and Russia's state-controlled Gazprom signed a memorandum of understanding on Saturday to carry out a feasibility study for the pipeline.

The 900-kilometer pipeline would take gas from Russia to the EU under the Black Sea, coming ashore in Bulgaria.

It would then branch out into two directions - north to Austria and Slovenia and south to Italy via Greece, Eni's CEO Paolo Scaroni told a news conference, held jointly with Gazprom deputy chief executive Alexander Medvedev.

The cost of the project will be clear after the feasibility study is completed.

Just like its complementary project North Stream, it would bypass Ukraine, with whom Gazprom had a pricing dispute in January 2006, which significantly cut into the deliveries of Russian gas into Europe.

The South Stream is the third project developed under the strategic cooperation agreement in place between Eni and Gazprom.

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