Prime Minister Vladimir Putin Tuesday talked up the prospects of a planned Russian-sponsored pipeline to Europe while expressing doubts over the European Union-backed Nabucco project that bypasses Russia.
Putin said after talks with his Hungarian counterpart that there was "no problem" with the financing of South Stream, which aims to transport Russian gas to southern Europe through the Black Sea and Central European states.
The South Stream pipeline notably avoids the territory of Ukraine, with whom Russia was engaged in a protracted gas dispute in January which resulted in a cut of Russian gas for two weeks to a dozen E.U. states, including Hungary.
But he was less optimistic about the prospects for Nabucco, an E.U.-backed pipeline between Turkey and Austria that will transport gas from the Caspian Sea to Western Europe, bypassing Russia and Ukraine.
"As for other routes, I have nothing against them," Putin told reporters at a news conference with his Hungarian counterpart Ferenc Gyurcsany, whose country receives the vast majority of its gas supplies from Russia.
"But Nabucco will not reduce the number of transit countries but increase them. Azerbaijan, Turkey, Georgia.
"But even that is not enough as Nabucco cannot be carried out unless Iran joins the project."
Iran has the second largest gas reserves in the world after Russia but so far its international isolation and huge domestic demand have stifled its potential as an exporter.
He estimated the cost of South Stream at EUR10 billion, adding: "Problems with financing (it) do not exist."
Hungary has been an enthusiastic supporter of the Nabucco pipeline and Gyurcsany said that after the Ukraine gas crisis it did not want to be reliant on one pipeline alone.
"Hungary is interested in there being as many pipelines as possible," he said.
"I want our Russian friends to understand there is no greater risk than for one country to depend on one pipeline. We cannot be happy about the fact we only have one supplier."