The pipeline, a joint venture between Eni and Gazprom, will stretch from Sochi to Bulgaria, Greece, Serbia, Hungary and Italy, bypassing Ukraine, which has been involved in disputes over gas prices with Russia.

Nabucco pipeline

A gas pricing dispute in January this year led to severe energy shortages across Europe, prompting European Union nations to press ahead with the alternative Nabucco pipeline, which would not rely on Russian supplies.

Gazprom criticised EU states over the Nabucco deal, saying: "Activities around Nabucco are being initiated by politicians, most often from across the Atlantic, because it is a political not an economic project."

The Nabucco pipeline would stretch 3,300km from Turkey to Austria and intends to transport up to 31bn cubic metres of gas each year to western Europe.

But the project faces the challenge of finding alternate gas suppliers before it can get off the ground, with only companies in Azerbaijan agreeing to feed the pipeline so far.

Turkmenistan, seen as the other big potential supplier to Nabucco, refused to join the project at a summit in early May in Prague, despite its uneasy relations with Moscow.