Croatia and Bosnia-Herzegovina on Tuesday signed an agreement to construct a new gas pipeline aimed at reducing dependence on Russian supplies and strengthening energy security across the Balkans.

The Southern Interconnection pipeline will link Bosnia with Croatia’s gas network and the liquefied natural gas terminal on the Adriatic Sea island of Krk. Bosnia has designated a U.S.-based company, AAFS Infrastructure and Energy, as the project's investor and developer.

Croatian Prime Minister Andrej Plenkovic and the chair of Bosnia's Council of Ministers, Borjana Kristo, signed the deal in the presence of U.S. Secretary of Energy Chris Wright on the sidelines of a summit of the countries of the Baltic, Black and Adriatic regions.

Plenkovic on social media said the gas pipeline would help diversify supplies: "We are strengthening energy security and independence ... which is especially important in these challenging global circumstances."

Kristo called it "a big day for both countries."

Bosnia currently imports practically all of its gas from Russia via pipelines running through neighboring Serbia and through Bulgaria along the TurkStream route.

The new gas pipeline investment could reach up to $1.5 billion, local media have reported.

The U.S. delegation also included Under Secretary of State for Political Affairs Allison Hooker, who told a panel that the U.S. can help "reduce energy dependency on Russia and to spur economic growth" in the region.

Separately, investment group Pantheon Atlas LLC announced plans for the development of a 50 billion-euro ($58 billion) "hyperscale AI data center and innovation campus” in Croatia. A letter of intent was signed with Croatia's Koncar Group as a local partner.