REUTERS - Vladimir Putin won Ankara's approval on Thursday for a Moscow-backed gas pipeline to cross Turkish waters to Europe, matching rival EU-sponsored plans, and signed deals to help make Turkey a vital regional energy hub.
 
Turkey's Prime Minister Tayyip Erdogan said his country had allowed Russia to proceed with the South Stream pipeline that Moscow aims to build ahead of the European Union-backed Nabucco link from the Caspian -- a scheme meant to cut Europe's reliance on Russian gas.
 
His Russian counterpart Putin said Moscow had decided in turn to support an oil pipeline planned to run from Turkey's Black Sea town of Samsun to the Mediterranean oil hub of Ceyhan.
 
Russia, which supplies a quarter of Europe's natural gas, wants to accelerate construction of gas supply routes to bypass Ukraine and other ex-Soviet states after disputes with Kiev over transit payments in recent years disrupted flows.
 
Turkey's support for the Kremlin-backed project should ensure both delivery and supplies of gas via Russia.
 
That is a promise which the Nabucco project, which is still seeking gas supplies in the Caspian region and Central Asia, has yet to deliver.
 
South Stream could further hinder efforts to secure supplies for Nabucco by offering an alternative route via Russia for producing countries in the region and Russia has already been approaching them over purchases of their gas. Erdogan said South Stream and Nabucco were not alternatives to one another, but rather reflected diversification in energy supplies. His comments were echoed by Putin.
 
"Construction of the South Stream does not block Nabucco. Depending on demand from consumers, both projects can be realised," Putin told a joint news conference.
 
Russian Energy Minister Sergei Shmatko said construction of the South Stream pipeline will start by no later than 2010 and there were no serious reasons for a delay.
 

Turkey's growing ambitions
 

Turkey and Russia have nearly $40 billion in mutual trade, while Moscow supplies Turkey with two thirds of its natural gas.
 
Analysts say the agreements signed on Thursday, focused on gas and oil pipelines, reflected EU-member candidate Turkey's greater political ambitions within the region, expanding beyond its traditional Western allies.
 
In July, Turkey and four EU countries signed a transit agreement for the Nabucco project, which Turkey has used to gain leverage in its EU membership talks.
 
"The (South Stream) talks coming so soon after signing of Nabucco shows Turkey is willing to continue playing on all possible fronts to become an energy hub and to become a strategically important player in the region," said Eurasia Group analyst Wolfango Piccoli.
 
Despite Putin's assurances, some analysts say the South Stream deal would mark a new success for Russia in its fight to undermine the construction of the Nabucco pipeline.
 
Had Turkey rejected South Stream, Russia would have been forced to go through Ukraine's territorial waters.
 
But Wolfgang Ruttenstorfer, chief executive of Austrian energy company OMV, the senior partner in Nabucco, said there was room for both projects as gas output in Western Europe was projected to decline.
 
"These projects are not at all competing but are complementary," he told Reuters in an interview. "Even if we assume there will not be very much demand, it's a certainty production in Europe will decline."