Russia and Republic of Srpska has signed a cooperation agreement on the South Stream gas pipeline on Wednesday, which will look at the potential for extending the pipeline to the Balkans Republic.

 Prime minister of Republic of Srpska, Milorad Dodik, and Russia's energy minister Sergei Shmatko met in Moscow to discuss a range of ways to bring the republic into the project.

Shmatko said it was in the interest of Europe to create favourable conditions to implement the South Stream gas pipeline project, as it would permit reduced gas prices for European consumers.

“We're being told that the project is too expensive and this gas is not needed in Europe. I'd like to draw your attention to the fact that the gas will be sold at the market price that will be formed in Europe, while the European consumers should not be worried about the cost of the South Stream construction – this is a concern to shareholders. The more gas there is on offer in Europe, the more the market price may drop, which is in the consumers' interest.”

Milorad Dodik added that there was no real alternative to the project, with the project expected to effect reliable supplies across Europe.

“We're absolutely sure that there is no alternative to the South Stream project. And we're also confident that the construction of the South Stream will provide regular gas deliveries not only to the whole of Southern Europe but also to many consumers in the rest of Europe.”