Russian First Deputy Prime Minister Dmitry Medvedev, who is President Vladimir Putin's anointed successor, signed a deal with Serbian Prime Minister Vojislav Kostunica on the implementation of the project to build South Stream, which would transit 10 billion cubic meters of Russian natural gas per year through Serbia to the Balkans and on to Europe.
"This agreement serves interests of both, Russia and Serbia, and lays the foundation for the regime of energy security in the unified Europe," Medvedev said.
The comments were reported by RIA Novosti.
Last month Russia's Gazprom Neft, the world's largest natural gas company, agreed to buy 51 percent of Serbia's state-owned NIS for a reported $580 million.
The race to supply Europe with gas is heating up. South Stream's main rival is the EU- and U.S.-backed Nabucco pipeline that would carry gas via Turkey through Europe. Nabucco is being painted as a way for Europe to reduce its dependence on Russian supplies, which account for nearly a third of the EU's overall gas imports. Although Nabucco has some big European names who've signed on, it still lacks a gas supply.
South Stream is backed by Gazprom and Italy's Eni.