MOSCOW (Commodity Online) : Russia said Tuesday, the possible merger of the Russian energy giant Gazprom and Ukraine's Naftogaz has no bearing on the South Stream project.

Russian Energy Minister Sergey Shmatko said, We do not relate these two issues. South Stream is an issue of principle for us, a strategic entry to direct supplies for European buyers.

Shmatko said the details of the project were a topic for the countries participating in South Stream.

Everything will be determined by the feasibility study, how flexible the relationship is between the cost of the pipeline and the volume of deliveries, Shmatko said.

The energy minister said there was no reason to suspend work on South Stream.

I believe if we manage to supply large quantities of gas at reasonable prices we will be competitive. As I understand it, Europe needs an additional 100-120 billion cubic meters of Russian gas, he said.