MOSCOW, November 10 (RIA Novosti) - Russian President Dmitry Medvedev and Austrian Chancellor Werner Faymann will discuss energy cooperation, in particular Russian gas supplies to Europe, on Tuesday, the Kremlin said.

Faymann is arriving in Russia on a two-day visit Tuesday. He is also expected to hold talks with Prime Minister Vladimir Putin.

"One of the strategic directions of Russian-Austrian cooperation could be the implementation of the South Stream project," a Kremlin spokesman said, adding that bilateral ties enjoy "stable" and "positive" dynamics.

The spokesman said Russia and Austria are both convinced that the South Stream project will "contribute to Europe's more stable energy supply" and will "ensure unhindered transit of Russian natural gas to European consumers."

He said an intergovernmental agreement to build the pipeline's Austrian section is being developed.

The South Stream gas pipeline, scheduled to be completed by 2015, is part of Russia's efforts to cut dependence on transit nations. It is a rival project to the EU-backed Nabucco, which would bypass Russia.

The 25 billion-euro ($36.5 billion) project is designed to annually pump 31 billion cubic meters of Central Asian and Russian gas to the Balkans and on to other European countries, bypassing Ukraine, which has frequent disputes with Russia over gas supplies and transits. The pipeline's capacity is expected to be eventually increased to 63 billion cubic meters.

On May 15 Russian energy giant Gazprom signed a package of project-related documents with Bulgaria, Greece and Serbia. Similar agreements are being now coordinated with Slovenia and Austria.

In September, Austrian President Heinz Fischer said during a meeting with Medvedev in New York that Russia remained a reliable partner for his country in all spheres, including the energy sector.

Fischer said that despite the economic crisis, Russia and Austria continued to boost ties, including in energy cooperation, adding that he was convinced the trend would be preserved.

Medvedev said that although the crisis had had a negative impact on trade between the two countries, the task of the two states' leadership was "to compensate for the decline as soon as possible."