Russia denies gas pipeline deal with Greece

Russia has denied a German report on a deal to provide up to €5 billion ($5.4 billion) to struggling Greece as an advance for the construction of ''Turkish Stream'' gas pipeline through the country.

Russian president Vladimir Putin's press secretary Dmitry Peskov said over the weekend in an interview with Business FM that there was no such agreement.

Earlier this month Putin met Greek prime minister Alexis Tsipras in a much-anticipated summit in Moscow although there were no ground-breaking announcements.

''Of course, the issue of energy cooperation was raised, and at the end of the summit talks it was agreed that all issues related to cooperation in the energy sector will be studied at the expert level. But, Russia has not promised any financial assistance because no one asked for it,'' Peskov said.

He was commenting on the report published on German business magazine Der Spiegel citing a senior source from Greece's ruling party Syriza.

The report said Russia and Greece are planning to sign an agreement under which Moscow will provide an advance payment of up to €5 billion for gas transit through that country as part of its proposed Turkish Stream gas pipeline.

According to the magazine, a senior Syriza minister said the deal would "turn the tide" for the cash-strapped country struggling to avoid a debt repayment crisis, and could be signed as early as Tuesday.

Following its disputes with the European Union, in December, Russia cancelled its previously planned South Stream gas pipeline project passing under the Black Sea to Bulgaria and beyond to supply gas to Balkan countries, Hungary Austria and Italy.

Alternatively, it was decided to build the Turkish Stream pipeline to carry Russian gas to Turkey and build a gas hub in Greece for customers in Southern Europe. The pipeline will have a capacity of 63 billion cubic metres and is expected to become operational by 2019.

During the talks, Tsipras had expressed interest in participating in the pipeline project, under which Greece would receive advance payments from Russia based on anticipated future profits.

There have been no comments from the Greek government on the German report.

Germany's finance minister Wolfgang Schaeuble said Saturday in Washington that he would not have objection to any deal with Moscow but that would not solve Greece's problems in fulfilling its debt obligations.

Greece's new left-wing Syriza government is running out of cash to meet the €1.7-billion wages and pension bill due later this month and a further €1-billion IMF payment due mid-next month.

Greece has been negotiating with its creditors, the euro zone bloc, the International Monetary Fund (IMF) and the European Central Bank (ECB) to secure aid and avert a debt default.

Nevertheless, a deal seems still far as that would require Greece to agree on the creditors' programme of economic reforms by the end of next month.