Russia and Turkey have signed an intergovernmental agreement to build the Turkish Stream pipeline, Anadolu Agency reports.

The move coincides with a visit of Russian President Vladimir Putin and his country's Energy Minister to Turkey.

Novak and his Turkish counterpart, Berat Albayrak, have signed the document following a meeting of Putin with Turkish President Recep Tayyip Erdigan.

Turkish Stream was announced as a substitute to South Stream, a project that was designed to carry gas to Central Europe via Bulgaria.

Construction is expected to begin at the end of next year and is set to be completed by 2019.

The initial project consisted of four threads, of which only two will be built under the current agreement. Construction will begin only for the first one as of the moment, with precise parameters yet to be set.

A Russian company will build most of the infrastructure, retaining ownership of the sea section of the pipeline.

Ankara will also receive a long-demanded price discount. 

"I would like to point out that in this manner we are moving toward the realization of plans of the Turkish President to create a big energy hub in the country," TASS quotes Putin as saying.

Erdogan for his part announced that the two countries would seek to create an energy transport corridor to Europe in which Turkey would be the transit country.