For almost two years, South Stream and Nabucco have been racing each other to become the first pipeline to gas to consumers in Europe without transiting Ukraine. Russia’s latest coup in securing deals with Italy, Bulgaria, Greece and Serbia on May 15 to speed up the work appears to have given South Stream the edge, but was far from a fatal blow to its rival.

Italian prime minister Silvio Berlusconi flew to Sochi, the Russian Black Sea resort that is also the starting point of the pipeline, to oversee the signing of the package of deals with Russian prime minister Vladimir Putin.

The key provision of the addendum to the memorandum of understanding between Gazprom and Italian energy firm Eni was that the maximum capacity of the pipeline would be increased to 63 billion cubic metres of gas a year, double the initially agreed 31 billion cubic metres.

But in its eagerness to secure the deal with Eni, as well as agreements outlining the "principles of interaction between the parties in relation to the feasibility studies" with the three transit countries, Gazprom had to make a number of concessions.

With Eni, Gazprom agreed to the Italian firm’s demands for joint gas marketing, even though it initially wanted Eni to sell gas only in Italy. Eni said it would sell 12 billion cubic metres a year from South Stream in the transit countries, Reuters reported. Furthermore, Gazprom agreed to buy, at a premium, gas assets owned by Eni and Enel in Russia.

In Bulgaria’s case, Gazprom also had to drop its request to incorporate some of Bulgaria’s existing pipelines into the South Stream network. The Russian energy giant said it would allow to cut project costs, but in Bulgaria it was seen as a covert attempt by the Russian firm to acquire a stake in Bulgaria’s gas distribution network.

In the end, Gazprom said that it agreed to the demands because they made economic sense. "Activities around Nabucco are being initiated by politicians, often from across the Atlantic, because it is a political, not an economic project," the energy giant said in a statement, as quoted by Reuters.

"Some European politicians, mainly from new European Union members, are against expansion of new offshore pipelines. The genetic memories of their dependence on the USSR do not allow them to weigh all the pros and cons of such projects," Gazprom said.

Having experienced halted deliveries twice in three years because of pricing disputes between Russia and Ukraine, the EU wants to diversify its sources of gas, not only transit routes. Moscow argues that providing alternatives to the Soviet-era pipelines passing through Ukraine will be enough to improve European energy security.

The EU gets a quarter of its annual consumption of 600 billion cubic metres from Russia and the two South Stream shareholders moved to squash any fears that the pipeline would further boost Gazprom’s market share. "Most of this gas will substitute gas currently crossing Ukraine, and some new gas," Eni chief executive Paolo Scaroni said at the signing ceremony, as quoted by the Wall Street Journal.