BASF/Wintershall Executive Director Jurgen Hambrecht met in Moscow with Gazprom Chairman Alexei Miller to sign a memorandum of understanding for the offshore section of the South Stream natural gas pipeline.
South Stream is planned to carry gas through the Black Sea before branching off to countries in southern Europe.
Last week, Moscow brushed off suggestions Gazprom was scrapping the project amid talks of infrastructure for liquefied natural gas in the Black Sea.
The German company has a 20 percent stake in Russia's Nord Stream pipeline through the Baltic Sea. Russia aims to bring diversity to its export options to Europe by avoiding geopolitically sensitive transit networks through Ukraine.
"Together we are now strengthening the supply security in the southeastern European Union member states, where Gazprom and Wintershall have been successfully involved in gas trading for many years," said Hambrecht in a statement.
South Stream would move 2.2 trillion cubic feet of natural gas to Europe per year after it passes through the Turkish waters of the Black Sea. South Stream would branch into two sections -- one to Greece and Italy and another through Austria -- once it reaches Bulgarian territory. Gas flows are expected by 2015.