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* Russia prints pro-South Stream supplement in Italian paper
* Tony Blair to be appointed to support Azeri gas to Europe
By Henning Gloystein
LONDON, July 17 (Reuters) - Russia is stepping up a publicrelations effort in support of its controversial South Streamgas pipeline project to supply southern Europe, but a rivalproject to bring gas from Azerbaijan is also upping its game.
Russia is Europe's biggest supplier of natural gas, meetingalmost a third of the region's demand. Almost half of that gasis piped to the European Union via Ukraine.
South Stream is designed to carry 63 billion cubic metres ofgas per year, equivalent to almost 15 percent of EU demand, fromRussia via the Black Sea into central and southern Europe. Itwould bypass Ukraine and help Russia cement its position asEurope's dominant gas supplier.
La Repubblica, one of Italy's biggest daily newspapers,carried a full-page article on Thursday, part of an eight-pagesupplement provided by RBTH (Russia Beyond The Headlines), aninformation service owned by the Russian government, headlined'South Stream on its way to going ahead'.
The article said that "new countries have confirmed theirparticipation in the project intended to change the (gas) supplylandscape of EU".
Against the backdrop of conflict in Ukraine, the pipelineplan has become a focus of tensions between Russia and theEuropean Union. The EU Commission has suspended the approvalprocess for the project and has put pressure on member states tofreeze any work on the pipeline until the conflict is resolved.
"In the present context our position is very clear. SouthStream has no place when we are still in such difficulties withRussia. Accordingly, we proposed to suspend South Stream," saidDominique Ristori, director-general of the energy branch (DGEnergy) of the Commission in Brussels.
Despite the Commission's opposition to South Stream, theenergy industry and most countries in southern and centralEurope including Italy, Germany, Austria and Bulgaria supportSouth Stream, saying the region needs new supply routes to avoidfuture transit risk through Ukraine.
Moscow has been wooing EU governments to support SouthStream. Last month during a rare visit by President VladimirPutin to Vienna, Austria gave its final approval to South Streamin defiance of Brussels.
South Stream's main partners are Russia's Gazprom,Italy's Eni, France's EDF, Austria's OMV and Germany's Wintershall
COMPETITION FOR RUSSIA
Aware of Russia's efforts to push South Stream ahead,competitors are not sitting idle either.
Azerbaijan plans to begin exporting 16 bcm of gas to Turkeyand from there on to Italy towards the end of the decade via theTrans-Anatolian pipeline (TANAP) and Trans Adriatic Pipeline(TAP), competing directly with Russian gas.
The Azeri Shah Deniz 2 gas export project is part of theso-called Southern Gas Corridor project aimed at bringing newcentral Asian gas supplies to Europe.
Shah Deniz 2 is led by Britain's energy major BP,which is, together with its partners, setting up the SouthernCorridor Advisory Panel.
"An external panel set up voluntarily and jointly by... theSouthern Corridor projects' participants to advise on political,environmental, reputational and societal challenges that may befaced by the Shah Deniz 2, TANAP and TAP projects during theirearly years," a BP spokesman.
The Energy Intelligence Group reported that the panel hadcreated a three-member advisory board of former British PrimeMinister Tony Blair, former German Foreign MinisterHans-Dietrich Genscher and Peter Sutherland, chairman of GoldmanSachs International, but BP would not confirm this.
Shah Deniz 2 and TAP are losing some partners with stakes of10 percent or less. France's Total is withdrawing fromboth, and Germany's E.ON is leaving TAP. (Additional reporting by Francesco Guarascio and Barbara Lewisin Brussels and Oleg Vukmanovic in Milan; editing by Jane Baird)
