South Stream set to be completed by the end of 2015

Gazprom and Eni of Italy have agreed to more than double the capacity of the South Stream pipeline, and several European countries have signed agreements of their own with the Russian gas giant.

The Prime Ministers of Russia and Italy – Vladimir Putin and Silvio Berlusconi – presided over the signing of the second addendum to the memorandum on the South Stream project, in Sochi on Friday.

A joint project of Gazprom and Italy's ENI, the gas pipeline plans delivery of Russian, and possibly Central Asian gas to Europe across the black sea. For Russian Prime Minister, Vladimir Putin, it was a step towards a joint energy future.

"First and foremost, it's interdependence. Today the producer in the energy markets can ship to anywhere in the world. But if we build a pipeline worth billions of dollars – we are linked to our consumers. This provides stability to European markets and the economy."

Friday's deal expands capacity to 63 billion cubic meters annually – up from the 31 billion initially planned.

European countries are now a step closer towards construction of the pipeline after Gazprom signed agreements with gas companies of Bulgaria, Greece, and Serbia to set up join ventures for building national pipelines. Gazprom CEO, Aleksey Miller, says despite a leaner short term outlook for the EU economy financing is the least of his concerns.

“Capital expenditure for both the undersea and land parts of the pipelines totals 8.6 billion euro. Financing is provided for the project and there's no problem with it.”

Putin says Russia does not object to the construction of alternative projects like the Nabucco pipeline. But Tatyana Mitrova, from the Centre for International Energy Markets Studies, questions why anyone would even bother.

"Where will be final consumption? Both here Nabucco and South Stream, they have the same market and therefore there is a sort of competition, but without resources, you cannot compete."

Gazprom says a launch date for South Stream has been set for December 31, 2015 – with both the Russian and Italian sides trying to complete the project earlier if possible.