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Austria signs on to Russian gas pipeline

VIENNA (AP) — Russia and Austria signed a deal Saturday that will expand Moscow's position of strength in supplying Europe with natural gas by allowing it to expand a planned pipeline further into the EU.

Ahead of the signing ceremony, Russian President Vladimir Putin praised his country's planned South Stream pipeline, in comments dismissive of a competing EU-endorsed pipeline meant to reduce energy dependence on Russia.

The agreement signed by government and energy officials of the two countries allows Russia to lead South Stream into Austria. From there, the gas it carries westward under the Black Sea through Bulgaria and Turkey can be distributed to other European countries.

South Stream rivals the planned U.S. and EU-backed Nabucco pipeline. Austria is a major supporter of Nabucco, but has opted to also sign on to South Stream as it seeks maximum assurance of energy supply.

Both South Stream and Nabucco bypass Ukraine — and are thereby safe from the kind of price wars between Moscow and Kiev that have left Europe short of gas during several past winters.

While both projects remain years away from realization, South Stream appears to have the edge.

Since its inception eight years ago, Nabucco has been mired in doubt about the availability of non-Russian gas to supply it. That, in turn has dampened investor interest — a delay exploited by Moscow and Beijing to lock in gas from Central Asia, the projected source for Nabucco.

Putin, who met Austrian Chancellor Werner Faymann, was dismissive of Nabucco at a news conference ahead of the signing, referring to its difficulties in attracting firm commitments from potential gas suppliers.

"I'd like to point out what the experts know — that before you build something, you need to finalize contracts for (gas) delivery," he said, in Russian comments translated into German. "Building a pipeline without (such) a contract is senseless — you just don't do things that way."

Russia supplies Austria with about 70 percent of its natural gas needs and all of Europe with about 20 percent, with some former Soviet bloc nations almost fully dependent on Moscow.