The agreement on building and operating OAO Gazprom's (GAZP.RS) South Stream pipeline on European Union territory between Russia and the EU prevails over European energy law, Russian Prime Minister Dmitry Medvedev told journalists Tuesday, Interfax reported.

The agreement between EU and Russia is governed by international law and thus trumps the so-called Third Energy Package, which is a national law, Mr. Medvedev said.

The EU energy commissioner said Friday that Russia should lodge an application with the EU for an exemption to its energy rules so that it can operate South Stream the way it hopes to on EU territory.

The European Commission also said last week that agreements signed between Russia and six EU member states through which South Stream will pass weren't in line with EU rules. It asked the member states to go back and amend these agreements to comply with the bloc's laws, in particular the opening up of various parts of the operation of the pipeline to competition.

Mr. Medvedev also said he sees opportunities for aligning the interests of the EU with the energy agreements that have already been made.
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