Gazprom touts South Stream -- which would stretch about 575 miles long offshore and more than 900 miles through the territory of southern European countries -- as an option to ensure European gas supplies are stable.
Ukraine hosts the bulk of Russian gas supplies for Europe, exposing the European energy sector to the risks associated with ongoing disputes between Kiev and the Kremlin.
Gazprom said it's concluded all of the contracts needed to start construction of the onshore section of the pipeline later this year. It's placed orders for more than 150,000 sections of pipeline already.
Henning Voscherau, chairman of the South Stream board of directors, said the pipeline would be beneficial not only to European consumers but to stakeholders as well.
"I am sure that South Stream will also promote cooperation on a larger scale, as the gas pipeline will yield mutual benefit and secure the reliability of energy supply to Bulgaria and Europe as a whole," he said in a statement Friday.
Gazprom said some sections should be open to receive gas by 2016 and the full system should be operational by 2018.
A resolution passed in April by the European Parliament calls on members of the European Union to reconsider the pipeline. EU leaders have said the pipeline would strengthen Russia's grip on the energy sector.