Serbia's state-run gas company and Russia's OAO Gazprom (GAZP.RS) will form a joint company on November 17 to build the Serbian section of the South Stream gas pipeline, Beta news agency reported Monday.
Gazprom will have a 51% stake in the new company while Srbijagas of Serbia will control 49%, said Srbijagas manager Dusan Bajatovic.
The EUR20 billion South Stream pipeline should be completed by 2015 and will run under the Black Sea to Bulgaria, Serbia and Hungary before branching out to western Europe.
The part passing through Serbia should be 450 kilometers long, with capacity of at least 20 billion cubic meters of gas a year. It is expected that EUR700 million would be invested in the construction of Serbia's branch of the pipeline.
As part of a wide-ranging accord, Serbia allowed the South Stream gas pipeline to pass through its territory while Moscow pledged to build an underground gas storage facility in Serbia.