Slovenian company Plinovodi and the Russian giant Gazprom have signed a deal to build a Slovenian branch of the South Stream gas pipeline, local media reported Tuesday, reported dpa.
The deal was signed in Moscow by the directors of Gazprom and Plinovodi.
The 226-kilometre section of the pipeline through Slovenia will cost 1 billion dollars to build, the 24ur.com news portal said, with construction on the branch due to begin in 2014.
The South Stream pipeline will cost 16 billion dollars in total and will transport up to 63 billion cubic metres of Russian gas to southern and Central Europe.
It will run under the Black Sea and bypass Ukraine, with which Russia has had several rows over the cost of gas transit in the past.
The pipeline is to cut across Bulgaria, Serbia, Hungary, Slovenia, Austria and Italy, with offshoots to Greece and Croatia.
The Russian side plans to begin construction in late 2012 and to start delivering gas in the first quarter of 2016.
Slovenia, a member of the European Union, signed the deal despite the bloc's intent to reduce its dependence on Russian gas. It is proposing to build its own pipeline, Nabucco, and tapping sources in Iraq, Azerbaijan, Turkmenistan and Egypt.