Russian state gas company Gazprom said on Monday it would set up a company to build a gas pipeline to Turkey, days after President Vladimir Putin announced the new project, according to Reuters.

“The company will be registered in St. Petersburg … (it) is called “Gazprom Russkaya“, Gazprom spokesman Sergei Kuprianov said in a statement.

Putin said last week Russia was dropping the South Stream project and was instead planning to build a pipeline to Turkey and could set up a gas hub on the Turkish-Greek border to supply Europe with gas.

Russian group Gazprom and Turkish firm Botas signed a memorandum of understanding to build a submarine pipeline with a capacity of 63 billion cubic meters of natural gas transmission from Russia to Turkey.

Russia already supplies gas to Turkey through the Blue Stream and recently Turkish authorities have asked the Russian side to increase the flow to three billion cubic meters per year via Blue Stream gas supplies.

The project pipeline to Turkey has the advantage that at the starting point remains the same – Anapa compressor station in Krasnodar district and the infrastructure already built can be adjusted without losses for Gazprom and the pipe producers.