Russian newswire RT said the pipeline will stop at the Greek border in Turkey to provide this market access.

"The pipeline will have an annual capacity of 63 billion cubic metres," RT reported.

"A total of 14bcm will be delivered to Turkey, which is Gazprom's second biggest customer in the region after Germany."

Russian President Vladimir Putin, who held a press conference in Ankara on Monday, agreed to give Turkish customers a 6% discount on Russian gas prices from January 1 while there are options to increase this discount to 15% through further negotiations.

Development timeframes and capital expenditure estimates for the Turkey-linked pipeline project were not revealed by the newswire.

The deal with Turkey follows Putin's recent decision to mothball Gazprom's South Stream pipeline project, which was going to use underwater Black Sea pipelines to link up Russian gas to Bulgaria - bypassing conflict-ravaged Ukraine.

"The project had run into difficulties, as it violated European Union regulations on the same company owning the pipelines and the gas they transported," RT reported.

South Stream fallout

Meanwhile, contractors scheduled to work on South Stream have been left in the lurch, with the project's main contractor Saipem casting doubt over whether the pipelines have been cancelled at all.

The company said that while it had noted the statements made by Putin and Gazprom CEO Alexey Miller on the cancellation of the project, it had not received formal notice of termination from its client South Stream Transport.

"Operational activities therefore continue to progress," Saipem said, adding that any cancellation or hold up would be subject to contractual terms.

The Italian oil field services provider signed a contract in March for the pipe-laying works in relation to the first pipeline, additionally signing a $US552 million ($A652.6 million) deal to support works relating to the second line, scheduled to be laid by Allsea's mammoth Pieter Schelte vessel.

Gazprom announced as recently as November that the front end engineering and design activities for the project had been completed and that construction was ready to begin in the Black Sea.

Almost 300,000 tonnes of pipes had been supplied for the first offshore string, while pipeline sections for the deepwater part of the project were being welded in the port of Burgas, Bulgaria.

Saipem's shares plummeted 8.3% on the news of the cancellation.

Allseas expressed disappointment over the cancellation, with the 900km section of the second trunkline forming a large part of the Pieter Schelte's 2015 summer work log.

"The loss of the South Stream line 2 contract is unfortunate and means that Allseas will now start searching for new work for that period," the company told offshoretoday.com.