Russian Prime Minister Vladimir Putin hosted his Italian counterpart Silvio Berlusconi at the Black Sea resort of Sotchi to mark the event.
Both oversaw the signing of the agreement between Gazprom and Italy's Eni, which will more than double the capacity of South Stream, from 31 billion cubic metres per year (bcm/y) to 63bcm.
Commenting on the forthcoming EU-Russia summit in Khabarovsk on 21-22 May (EurActiv 14/05/09), Putin, who has excellent personal relations with Berlusconi, said he would like to have as good relations with the EU as with his Italian guest.
In return, Berlusconi stated that Russia was a "friendly" country that kept its promises as a gas supplier. The Italian leader also advised the EU to cultivate the same kind of good relations that Rome enjoys with Moscow.
On the sidelines, Gazprom signed deals with Eni of Italy, DESFA of Greece, Serbija Gaz and a Bulgarian energy holding. Gazprom chief Alexei Miller said that the decision to boost the capacity of South Stream was taken following a request from the Italian side.
South Stream has now entered the construction phase, Miller indicated, adding that the project would be completed by the end of 2015 at the latest. The cost of the pipeline will be 8.5 billion euros, he specified.
In Sotchi, Putin alluded at the EU's rival Nabucco project and questioned whether there would be gas available to fill the pipeline.
"For starters, before investing billions of dollars in a pipeline, burying the money in the ground, they need to understand where the gas will come from for this pipeline," Putin said, according to the Russian government website.
In the meantime, the press reported that Russia is ready to buy all the gas from a large offshore development in Azerbaijan, known as Shah Deniz II.
Europe's hopes of securing gas from Azerbaijan via Nabucco were recently further dampened (EurActiv 20/04/09) when the country's president, Ilham Aliev, said he wanted Russia to serve as a transit route for selling gas to Europe.