Russia on Monday vehemently rejected merging Moscow's planned South Stream pipeline with the rival EU-led Nabucco plan, after its key Italian partner said the competing projects could join forces.

"We are not discussing such things at all," Energy Minister Sergei Shmatko said in comments carried by Russian news agencies. "For European consumers, the more gas the better."

Russia is the main backer of the South Stream pipeline that plans to carry Russian gas under Black Sea and into the Balkans to create a new energy route to Europe that will by-pass Ukraine.

But the EU has been behind a competing project, the Nabucco pipeline, which aims to carry gas from the Caspian Sea region to Europe and is seen as a way of reducing European reliance on Russian gas.

The main foreign partner of Russia and state-controlled gas giant Gazprom in the South Stream project is Italian energy firm Eni.

But the chief executive of Eni, Paolo Scaroni, raised eyebrows in Russia last week when he told an conference in Houston, Texas that the two competing projects could benefit from joining forces.

"These pipelines are not alternatives, they are complementary.... What we have here is what investment bankers would call a strategic fit," Scaroni said, according to the text of the March 9 speech published on the Eni website.

"Should all partners decide to merge the two pipelines for part of the route, we would reduce investments, operational costs and increase overall returns," he said.

The Russian edition of weekly Newsweek said his comments had greatly irritated Gazprom. It quoted an unnamed source in the world's largest gas firm as describing them as a "betrayal."

"Until now Eni was Gazprom's partner in South Stream and the only true ally in its fight against Nabucco," the weekly said.

Shmatko insisted that South Stream remained the most competitive project as it had already signed the appropriate agreements and did not have to worry about where the gas for the pipeline would come from.

"Our project seems to me to be stronger as we have agreements and gas. We are waiting for the time when the Nabucco project can compete with us," he said.