RIA Novosti cited Russian government official said that Moscow will not cancel the South Stream natural gas pipeline over a rival project, Nabucco which will supply Caspian gas to Europe by passing Russia.

The official said "I am 100% sure that it will be built and this makes the Nabucco project extremely uncompetitive. He said that although the route for South Stream, which will pump gas from Russia to Bulgaria and on to other European Union states, has not been finalized, and not all project participants have been determined, the project is a "settled issue."

The official said "Although no feasibility study has been conducted and the route has not been determined, European countries including Italy and Greece have a strong interest in the project, and there is market demand for gas. There are no obstacles to the project."

The pipeline is set to cover over 900 kilometers under the Black Sea from Russia to Bulgaria and supply 30 billion cubic meters of gas annually. Possible routes for the land section of the pipeline in Europe, connecting to Austria and Italy are still being discussed.

The project is set to strengthen Russia's position as Europe's main energy supplier. The country already provides 40% of the continent's natural gas needs.