The launch of South Stream, the project pipeline pumping gas from Russia to Italy, would be delayed by two years to 2015, Russian business daily Vedomosti reported on October 3.

The pipeline was due to begin operations in 2013, Gazprom chairperson Aleksey Miller said in January 2008, but a strategy paper outlining the development of the gas industry, obtained by the newspaper, stipulated that South Stream would begin pumping gas at its initial capacity in 2015.

By 2024, it would reach its full capacity of 31 billion cu m of gas annually.

The exact date of the launch would be clear after the detailed business plan is compiled, an unnamed company source quoted by Vedomosti said. Gazprom, which owns the project together with Italy's Eni, plans to finish the business plans for each individual country that the pipeline will pass through in the third quarter of 2009, the newspaper said.

Russia has already secured agreements with Bulgaria, Serbia and Hungary for the transit of South Stream.

Gazprom's draft strategy did not stipulate the cost of construction, but earlier estimates put the figures at $10 billion for the underwater stretch in the Black Sea and another $10 billion for the land part, according to the paper.

Each year of delay, however, could add between five and 10 per cent to the bottom line, analyst Vyacheslav Bunkov from Russian brokerage firm Aton-line said, as quoted by Vedomosti.

The delay could also give an edge to the European Union-backed rival project Nabucco, which would likewise transit through South-Eastern Europe. Both projects were due to begin operations at the same time, but now Nabucco had a chance to stake its claim first, which could impact Gazprom's plans, the daily quoted analyst Konstantin Cherepanov as saying.

It was not the first time Gazprom's ambitious projects had to be delayed, with the North Stream's launch delayed by one year to 2011. Work on the pipeline is yet to begin, however, Vedomosti said.