Gazprom Chairman Alexei Miller met in Budapest with Hungarian Prime Minister Viktor Orban to discuss the South Stream natural gas pipeline.
"The talks confirmed that the construction of South Stream's Hungarian section would start in April 2015 and the first gas would come to Hungary in early 2017," the Russian energy company said in a statement Thursday.
Hungary will host 142 miles of the 1,500-mile long pipeline, which includes a section running under the Black Sea. It starts from the Russian coast of the Black Sea and eventually winds up in Italy.
South Stream is part of a Gazprom effort to add more diversity to its gas transmission sector for Europe. Most of Russia's natural gas for Europe runs through a Soviet-era transmission system in Ukraine and geopolitical issues there make conventional routes risky for both Gazprom and its European consumers.
Last year, Hungary received 187 billion cubic meters of natural gas from Russia.