Russia's Gazprom and Austria's OMV Group on Tuesday signed an agreement to construct the USD-45-billion South Stream gas pipeline project, which is expected to deliver 32 billion cubic meters of Russian gas to the country, bypassing Ukraine.
According to a statement by OMV, the project will be 50 percent owned by Gazprom, Russia's largest gas producer, and 50 percent by OMV, Austria's largest oil and gas company.
Construction on the Austrian section is expected to begin in 2015 and that the first deliveries will start in 2017, reaching full capacity in January 2018.
The agreement was signed amid the controversial visit of President Vladimir Putin to the country.
OMV CEO Gerhard Roiss said that South Stream fully complies with EU legislation.
"This project - investment in European energy security - will fully comply with EU legislation," Roiss said, as quoted by Itar-tass.
There has been controversy over South Stream, as is it needs EU approval so that it does not violate Europe's 'Third Energy Package', which says a company cannot both own and operate pipelines within the European Union.
Bulgaria and Serbia, countries nearly 100 percent dependent on Russian gas, have faced pressure from the EU to halt construction.
Ahead of Putin's visit to Vienna, Austrian ministers said they remained committed to Russia's South Stream project and that they plan to speed it up.