Csaba Baji, President and CEO of the state-owned Hungarian electricity works MVM, and Aleksandr Medvedev, deputy president of Gazprom, signed the shareholders’ agreement on the Hungarian section of the South Stream gas pipeline project in Budapest on Wednesday.

Baji said a final decision has been taken on the construction of the 229-km Hungarian section of the pipeline, which MVM’s shareholders’ meeting confirmed on Wednesday morning.

The pipeline section will have capacity to convey 30 billion cubic metres of natural gas a year. The investment is expected to cost €600 million, 70% of which would be covered from a loan. The investment is scheduled to be completed by January 1, 2016.

The South Stream gas pipeline will run from Russia under the Black Sea to Bulgaria and further to Greece, Italy and Austria, via Hungary. The pipeline will bypass Ukraine, whose disputes with Moscow have interrupted gas deliveries to Europe several times over recent years.