Putin, left, and Erdogan, agreed to allow Moscow the use of Turkish waters for a gas pipeline project [AFP]

Vladimir Putin, Russia's prime minister, signed the deal on Thursday in Ankara, Turkey's capital, with his Turkish counterpart, Recep Tayyip Erdogan.

The agreement will allow Russia to construct part of its South Stream natural gas pipeline through waters in the Black Sea.

"Turkey gave Russia permission for necessary studies to be carried out that would lead the South Stream pipeline through Turkey's exclusive economic zone in the Black Sea," Erdogan said at a joint news conference.

Silvio Berlusconi, Italy's prime minister, also attended the signing ceremony in a show of support for potential investment in the pipeline project in which Italian oil and gas giant Eni is involved.

EU competition

The deal would put Russia in direct competition with a European Union-backed pipeline project known as Nabucco, which bypasses Russia to transport gas from the Caspian Sea to Europe via Turkey and the Balkans.

Putin on Thursday acknowledged that the South Stream project would rival the EU one, but he suggested both pipelines were necessary.

"It is obvious there is demand for South Stream," he said.

"Even with the construction of South Stream, Nabucco will not be closed.

"The more infrastructure projects, the better, because that will create reliability and stability of energy supply to Europe."

Recommend this article...

Did you enjoy this article? Please bookmark it onto: