The project, dubbed "South Stream," will cross the Black Sea and should help quench Europe's growing demand for natural gas as the European Union's own production declines in coming years.
Both sides announced a memorandum of understanding for the project Saturday. South Stream marks another step toward the implementation of a strategic agreement Eni and Gazprom signed last November.
The companies said they'll determine the transport capacity of the pipeline after completing various studies.
Eni's American depositary receipts closed Friday up 61 cents at $71.36. Gazprom's ADRs ended the session down 45 cents at $40.50.