Russia, Turkmenistan and Kazakhstan have agreed to build a new natural gas pipeline north from the Caspian Sea. Russia's President Vladimir Putin announced the deal at a summit with Central Asian leaders in Turkmenistan.
The agreement ensures Russia's access to Turkmenistan's gas, and is a setback to rival US and European Union plans.
They had hoped to pipe Turkmen gas across the Caspian sea via Turkey, in order to reduce the EU's dependence on Russian-controlled energy. Following two days of negotiations the presidents of the three countries, meeting in the Turkmen port city of Turkmenbashi, announced they would sign a treaty on the planned pipeline by September. President Putin said the deal would mean increased energy supplies to Europe.
The new pipeline will carry gas from Turkmenistan, one of the world's largest sources of gas, through Kazakhstan to Russia.
The deal represents a victory for Russia, which buys Turkmen gas at below-market prices. The BBC's Natalia Antelava says the agreement is a huge blow to Washington, Brussels and Beijing, who have all been vying for direct access to Turkmenistan's gas. They have lobbied strongly for a route under the Caspian Sea to Azerbaijan and Turkey, bypassing Russia.
Turkmenistan's massive gas reserves are effectively controlled by Moscow, since it relies on Russian energy giant Gazprom's Soviet-era pipelines for distribution.
For two decades, the isolationist policy of Turkmenistan's late leader Saparmurat Niyazov made additional access impossible.
But his death last year opened a window of opportunity and it was hoped that new President Kurbanguly Berdymukhamedov would give the go-ahead to a trans-Caspian pipeline that would ease Europe's dependence on Kremlin-controlled energy.
Story from BBC NEWS:
Analysis: Russian pipeline deal
Russia, Turkmenistan and Kazakhstan have reached a landmark gas pipeline deal that will strengthen Moscow's control over Central Asia's energy export routes. The BBC's regional analyst, Ian MacWilliam, examines what this means for Moscow.
On the face of it, this pipeline deal seems to be all in Russia's favour. It means that for the foreseeable future, most gas from Turkmenistan and Kazakhstan will be exported via Russia. Moscow already buys Turkmen gas at less than market prices, enabling it to export its own vast gas resources to Europe more profitably. The Central Asians know that keeping the Kremlin happy will make their own lives easier. The Turkmen and Kazakh leaders both grew up under the Soviet Union and they will have noticed Moscow's furious reaction in past months when Estonia, Georgia and Ukraine angered the Kremlin.
But for the Central Asians, the Caspian pipeline to Russia is the best offer on the table. Washington and the EU have been backing a plan to build a pipeline westward under the Caspian Sea which would allow gas exports to Europe free of Russian control. But that plan is still little more than an idea and it would take years to find financial backing.
Turkmenistan's new President Kurbanguly Berdymukhamedov has said the Western-backed plan is still on the agenda, but energy experts say it is still not even clear just how much gas Turkmenistan has, and therefore how viable a trans-Caspian pipeline would be.
Russia's President Vladimir Putin, by contrast, has said that work will start on the Russian pipeline by next year and it will mean that Turkmenistan can export more gas. The Central Asians will plan to diversify their export routes in the coming years as gas and oil production increases.