The contract inked on Wednesday is for a 474-kilometer (296-mile) pipeline that would run from Bulgaria's southern border with Turkey to its western border with Serbia.
Gazprom's TurkStream pipeline would allow Russian natural gas to reach Europe without passing through Ukraine.
The Bulgarian section is designed to carry gas to Serbia, Hungary and Austria.
Bulgaria is heavily dependent on Russian gas. Partners in the West have repeatedly urged the country to diversify its energy sources.
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