Three major Western European energy companies - Italy's Eni, France's EDF, and Germany's BASF - formally joined Russian energy giant Gazprom as shareholders of the South Stream gas transit pipeline.

Eni, EDF, and BASF - through its hydrocarbon subsidiary Wintershall - sign up for a combined share of 50% in the offshore section of the Russian-sponsored South Stream gas transit pipeline, a major competitor of the EU-sponsored Nabucco pipe.

"This is a legally binding agreement between shareholders, a formalization of the cooperation between the companies to implement the South Stream project," a South Stream spokesman said.

For the onshore section of the pipeline, Gazprom has set up joint ventures with companies in Austria, Bulgaria, Croatia, Greece, Hungary, Serbia and Slovenia, the press release said.

South Stream, which will transport Russian gas to Southern and Central Europe via the Black Sea and Bulgaria bypassing the restless Ukraine, was originally a 50/50 venture between Gazprom and Eni but the Italian company subsequently agreed to grant part of its share to other partners.

Under the agreement signed Friday, Eni will retain a share of 20%, while the new South Stream partners, Electricite de France (EDF) and BASF's Wintershall will get 15% each. Gazprom keeps its 50% share.

"The signing demonstrates that the partner companies agree that South Stream is not only strategically important in the medium and long term, but that it is also a commercial opportunity not to be missed," South Stream chief executive Marcel Kramer said in a statement.

Participants in the South Stream pipeline project, intended to carry Russian gas along the bed of the Black Sea to Europe, will present its investment plan to banks in the second quarter of 2012, Paolo Scaroni, chief executive officer of Eni, one of South Stream shareholders, said on Friday, as cited by RIA Novosti.

Scaroni also confirmed that the Black Sea underwater section of the pipeline - from Russia to the Bulgarian coast near Varna - will cost USD 10 B, while the entire project is estimated to cost USD 21.5 B.

Russia plans to launch the South Stream pipeline in 2015. The pipeline will transport up to 63 billion cubic meters of gas under the Black Sea to central and southern Europe, diversifying Russian gas routes away from transit countries such as Ukraine, which currently is at odds with Russia over the price of gas. Ukraine currently accounts for 80% of Russian gas transit to EU nations.

Bulgaria's Bulgargaz, a subsidiary of the Bulgarian Energy Holding, and Gazrpom signed a road map for the construction of the Russian sponsored South Stream pipeline in Varna in July 2010, and during Putin's visit in Sofia in November 2010, they signed a shareholders' agreement for the project company, which is to construct the Bulgarian section of South Stream. Both parties will have 50% of the shares in the joint venture.

The South Stream pipe will start near Novorosiysk on the Russian Black Sea coast, and will go to Bulgaria's Varna; the underwater section will be 900 km long.

In Bulgaria, the pipe is supposed to split in two - one pipeline going to Greece and Southern Italy, and another one going to Austria and Northern Italy through Serbia, Croatia and Slovenia.

After the preliminary survey for the Bulgarian section of South Stream is completed, that Bulgaria will make a final decision on an EUR 500 M investment in its section of the South Stream project.

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