Prime Minister Vladimir Putin yesterday ordered construction of the South Stream pipeline that aims to deliver Russian gas to Western Europe while avoiding Ukraine, to start at the end of 2012.

Putin’s announcement marks an acceleration of the timetable for building the hugely ambitious pipeline and comes after Moscow won agreement from Ankara this week to lay the pipeline under Turkish waters.

“I think it would be desirable to start (construction) at the end of next year,” Mr Putin told the chief executive of Russian gas giant Gazprom Alexei Miller at a meeting at his Novo-Ogaryovo residence outside Moscow.

Mr Miller told Mr Putin that the total cost of the pipeline was estimated at €16.5 billion .

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