Russian energy company Gazprom and Serbian officials on Monday initialed a multimillion-dollar deal for the sale of majority stake in Serbia's oil company NIS, Belgrade media reported.

Serbia will sell 51 percent stake in NIS to Russian Gazprom for 400 million euros (560 million dollars) in exchange for a share in the South Stream gas line - a pipeline which will carry Russian gas to Bulgaria and Serbia before heading to Western Europe

Gazprom will also invest a further 550 million euros into modernization of NIS refineries by 2012 and construct a gas storage facility in northern Serbia, media reported.

The contract should be signed on Wednesday in Moscow. A high-ranking Serbian delegation, led by president Boris Tadic, will travel to Russia.

Analysts say the deal was politically motivated, since Russia was Serbia's biggest support in its fight against independence for Kosovo. Kosovo declared its independence from Serbia in February, a move that was recognized by majority of European Union countries and the United States.

The sale of NIS caused a rift among Serbian lawmakers. Economy Minister Mladjan Dinkic protested against it, saying the price was too low and that the Russians gave no guarantees that the South Stream gas line will go through Serbia.

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