Greece, Russia Reach Preliminary Gas Pipeline Deal; Greek Debt Woes Continue

Russia and Greece agreed to a deal on Friday that would bring Russian gas to Europe through Greece. The preliminary agreement will extend the Turkish Stream pipeline -- operated by Russia's Gazprom, the world's top gas producer -- with an annual capacity of 47 billion cubic meters, through Greece.

Construction on the $2.3 billion project is set to begin in 2016, Russian Energy Minister Alexander Novak said, according to CNN. However, Russia will not own the Greek section of the pipeline, but it will assist in financing the project, Reuters reported, citing Novak.

Greek Prime Minister Alexis Tsipras said on Friday: “I'm here because I believe that the role of a country that wants to explore its potential to succeed, [should] have a multi-dimensional policy in its relations with countries," according to CNN.

Greece’s ruling Syriza party has discussed possible gas and finance deals with Moscow before, and spoken out against European sanctions on Russia.

"The pipeline is not against anyone in Europe or the world," Greek Energy Minister Panagiotis Lafazanis reportedly said. "It is here to serve people, peace and stability. Energy can bring people together and not feed Cold War situations."

Analysts say the move is part of a plan for Russia to bypass conflict-ridden Ukraine while still maintaining its hold of the gas market over other European nations. "To help Gazprom reach Central European markets, Russia has advocated the construction of a pipeline that would run from Greece to Macedonia, Serbia and Hungary," researchers from Texas-based intelligence firm Stratfor said in a report, Bloomberg reported last month.

The decision from Athens comes at a time when its relations with the European Union remain strained. Negotiations between Greece and its creditors over the terms of Greece's debt and bailout have stalled in recent weeks, and both parties seem to be preparing for the possibility of a Greek default.

Greece’s debt currently stands at almost 177 percent of its GDP, and the country’s economy is estimated to have shrunk by over 25 percent since the crisis began in 2009. Most recently, in February, it reached an agreement for an additional $8 billion in bailout funds, but has refused to agree to austerity reforms proposed by its creditors.

Eurozone leaders on Thursday announced an emergency meeting to be held on Monday as a last-ditch attempt to save the country from bankruptcy as both sides have so far failed to secure a deal.

Some members of the Syriza party are also reportedly drawing up a default plan, which would see the country institute capital controls and nationalize its banking industry.