The collaboration comes as both countries are drifting away from Europe. The move will significantly deepen ties between the two, as both are looking for alternative avenues to escape their economic crises.
Russia and Greece took a considerable step towards bolstering economic co-dependence on Friday, as the countries' energy ministers signed a deal on Friday to collaborate on the Turkish Stream underwater pipeline.
The agreement would set up a joint venture to extend the underwater pipeline to Europe through Greek territory. Construction will start next year and is expected to be completed by 2019, when it will begin delivering up to 47 billion cubic meters of gas a year.
"This is the start of a large investment project in Greece that is beneficial to the country's economy," Russian Energy Minister Alexander Novak said at the signing ceremony, which took place on the sidelines of Russia's top economic summit on Friday.
Greece said funding for the project would come from Russian state development bank VEB. But its far from a selfless move on Moscow's part. Western sanctions over the conflict in Ukraine have crippled the Russian economy, and producers are scrambling to find alternative ways to deliver energy to the vital European market without going through their Ukrainian neighbor.
Pipeline or lifeline?
The two countries sealed the deal just hours before Greek Prime Minister Alexis Tsipras was scheduled to meet with Russian President Vladimir Putin on the fringes of the St. Petersburg International Economic Forum (SPIEF), which got underway in the palatial port city on Thursday.
The meeting is believed to be aimed at securing a loan for the ailing Greek government, which could run out of money by the end of the month, following months of fruitless attempts to secure additional aid from its Western creditors. Funding for the pipeline could be just that - an advance from the Kremlin.
During Tsipras' last visit to Russia, Putin hailed the Turkish Stream extension as a transformational step for Greece, which he predicted would become a major gas transit hub. This, he said, would increase Athens' clout and earn it hundreds of millions of dollars in transit payment.
pad/hg (AP, AFP, dpa, Reuters)