Reuters quoted a source at the company said after reports the EU had blocked a Gazprom plan to buy part of a trading platform in Austria said Russia Gazprom has picked Italy over Austria as the destination of its South Stream gas pipeline project.

Local Russian media said the European Commission had blocked Gazprom acquisition of a 50% stake in the gas trading platform of the Central European Gas Hub in Austria an outlet also coveted by the rival EU-backed Nabucco gas link.

One of the options for South Stream route was to run from Russia under the Black Sea to the Balkans with a branch passing through Austrian oil and gas company OMV hub in Baumgarten.

The Gazprom source said "There will be no transit through Austria only a spur will run to them."

The source added that South Stream will terminate in Italy, rather than in Central Europe.

A Gazprom spokesman declined to comment.

Gazprom owns 50% of the project while 20% belongs to Italy Eni. France EDF and Germany Wintershall have 15% each.

(Sourced from Reuters)