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.
Gazprom said preliminary construction activity for the offshore section of the 1,500-mile long pipeline is in "full swing" and the entire project is "being built in compliance with the schedule."
Gazprom plans to deliver natural gas through its South Stream pipeline to Europe by 2018. It's designed to have an annual capacity of 2.2 trillion cubic feet.
"It is planned to complete and promulgate the results of the bidding procedure among deep-water pipe-laying companies as well as to sign a pipe supply contract for the second offshore string of the gas pipeline before the end of the first quarter of 2014," Gazprom said. "The construction of South Stream's offshore section will start in autumn 2014."
The project runs through the Black Sea and then north from Hungary.