Marlene Holzner was quoted by Radio Free Europe/Radio Liberty as saying the European energy market would be best served if there was more than one company controlling natural gas issues in the region.
"In part of the [intergovernmental agreements for South Stream] it is said that basically it is [Russian natural gas company] Gazprom that will manage the pipeline," she said Thursday. "That would not be according to existing European legislation for new pipelines."
South Stream would travel through parts of southern Europe to add diversity to a Gazprom export strategy dependent on Ukraine. Debt issues between Gazprom and Ukraine's state energy company Naftogaz make that option risky not only for Gazprom but also for European energy consumers, who get about 20 percent of their natural gas from Russia.
European Union leaders have expressed support for the so-called Southern Corridor, a network of gas transit options from the Caspian region, to break the Russian grip on the European energy sector.
Despite the concerns, Holzner said "there is nothing that is foreseen in our energy legislation saying if there is an infringement we can stop" Gazprom from moving forward.