Aug. 6 (Bloomberg) -- Turkey agreed to allow its territorial waters to be used for OAO Gazprom and Eni SpA’s proposed South Stream natural-gas pipeline, under an accord signed in Ankara today.

Russian Prime Minister Vladimir Putin and his Turkish counterpart Recep Tayyip Erdogan agreed on an environmental study in Turkish waters for South Stream, a competitor to the European Union-backed Nabucco link into Central Europe, Erdogan said at the ceremony. The two countries also pledged to cooperate in nuclear energy and oil transportation. Italian Prime Minister Silvio Berlusconi also attended today’s ceremony.

Russia’s state-run gas exporter Gazprom is looking to the South Stream pipeline, a 900-kilometer (560-mile) link under the Black Sea from Russia to Bulgaria, to help diversify supplies to Europe that were disrupted in pricing disputes with Ukraine, while retaining control over exports to the continent.

“It is obvious there is demand for South Stream,” Putin said, adding that Turkey and Russia “agreed on everything.”

The pipeline, with annual capacity of 63 billion cubic meters, will open on Dec. 31, 2015, and cost 8.6 billion euros ($11.6 billion) for both the subsea and overland segments, Gazprom Chief Executive Officer Alexei Miller said in May.

Erdogan said Turkey, Russia and Italy may also cooperate on extending the Blue Stream pipeline, which crosses the Black Sea from Russia to Turkey, south into the Middle East. Putin said the gas may be shipped to Israel, Syria, Lebanon and Cyprus.

The Nabucco pipeline plans to bring gas from the Caspian region into Austria via Turkey, avoiding Russian territory. Russia is the world’s biggest gas producer and supplies Europe with about a quarter of its gas needs.

Gas Cuts

The 7.9 billion-euro Nabucco project is meant to prevent a repeat of the hiatus in gas deliveries that cut supplies to European consumers twice since 2006.

Officials from Turkey, Bulgaria, Romania, Hungary and Austria signed an accord in Ankara on July 13 for the OMV AG-led Nabucco project, which has been in planning since at least 2004. It’s due to send as much as 31 billion cubic meters of Caspian Sea-region gas a year via Turkey to Austria, starting in 2014.

Erdogan said Nabucco and South Stream aren’t rivals and together will offer diversity. Putin said the South Stream project won’t shut out Nabucco. Russian Energy Minister Sergei Shmatko said earlier today that construction of South Stream should begin next year.

Erdogan said he and Putin also agreed on an extension of Turkey’s contract to buy Russian gas.

Turkey is Russia’s third-largest gas customer after Germany and Italy, buying 24.5 billion cubic meters last year, and 9.6 billion cubic meters in the first half of this year, according to Gazprom data.

Eni Pipeline

Russia also agreed to join the proposed Samsun-Ceyhan pipeline, to be built by Eni and Turkey’s Calik Holding AS, to carry oil from the Black Sea to the Mediterranean. Gazprom said in July last year that the company’s crude oil arm would be interested in joining the project. Shmatko said today that work on the pipeline could start after a feasibility study.

Russia’s involvement in that pipeline is “an important opening,” since it had previously backed an alternative route from the Black Sea via Bulgaria and Greece, Eni’s Chief Executive Officer Paolo Scaroni told reporters in Ankara today.

Russia and Turkey also signed agreements to cooperate in nuclear energy, including a safety protocol, Erdogan said.

Russia’s ZAO Atomstroyexport was the sole bidder in an auction last year to build Turkey’s first nuclear plant. The two countries are currently negotiating over the price of electricity from the plant, Istanbul-based Hurriyet newspaper reported today.

To contact the reporters on this story: Lyubov Pronina in Ankara via Moscow office at lpronina@bloomberg.netAli Berat Meric in Ankara at americ@bloomberg.net

Last Updated: August 6, 2009 11:08 EDT