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. Last Updated: 07/27/2016

Gazprom, Eni to Ink Pipe Deal

Gazprom and Italy's Eni will sign a deal on Thursday confirming their plan to build a new pipeline to supply Russian gas to Europe, industry sources said.

Sources close to both Gazprom and Eni said Wednesday that the deal would be signed as part of Italian Prime Minister Romano Prodi's visit to Russia for talks with President Vladimir Putin.

In June, Gazprom and Eni unveiled a preliminary plan to build a 900-kilometer South Stream pipeline that would go under the Black Sea, come ashore in Bulgaria and proceed to Austria, Slovenia, Italy and possibly Greece.

Bulgarian officials have previously estimated the cost of South Stream at 10 billion euros ($14.81 billion).

Some of the gas for the pipeline, carrying 30 billion cubic meters a year, will come from Eni's Russian fields, previously operated by bankrupt oil firm Yukos.

Analysts have interpreted the plan as an attempt by Gazprom to undermine a rival plan by Azerbaijan to supply southern Europe via Turkey through a pipeline known as Nabucco.

Nabucco, seen as important to diversify Europe's sources of gas away from reliance on Russia, is owned by a consortium of Austria's OMV , Hungary's MOL , Turkey's Botas, Bulgaria's Bulgaraz and Romania's Transgaz.

Gazprom -- which supplies Europe with a quarter of its gas needs -- has long sought alternative routes to avoid current transit states Ukraine and Belarus.