A crucial agreement on oil and gas pipelines was reached, between Russia and Turkey, on Thursday, during Prime Minister Vladimir Putin’s visit, which will pave the way for construction of the South Stream pipeline.

The first step taken on a vital link in Russia's energy export plans. Thursdays protocol signing sees Russia and its Black Sea neighbour compromising on exploration and the possible routing of the South Stream pipeline through Turkish territorial waters. The Russian Prime Minister said the agreement would underpin European energy security.

“Today its evident that the SS pipeline is in demand – its extremely important for Europe’s energy security and development of Russia’s relations with Turkey.”

Also on hand to take part in discussions was Italian leader, Silvio Berlusconi. The South Stream project came about in 2007 when Russias Gazprom and Italys ENI signed up to build the pipeline network which will take Russian gas into the Balkans across the Black sea from Russia. Turkish involvement brings the project closer to fruition with construction expected to commence in 2010.

In all there were ten protocols signed in Ankara concerning gas transport and supply. Outcomes will include existing gas routes being supplemented with Turkish gas storage facilities, and the development of Blue Stream II, which will see Russian gas taken to Israel and Syria, via Turkey and Cyprus. Turkey and Russia also agreed on the Samsun-Ceyhan pipeline project, to run from the Black Sea to the Mediterranean.

Experts see the deal as Russia’s bow toward Turkey. It is the third largest consumer of Russian gas and is aiming to become a major regional gas transit nation, betting on increased demand from Europe for energy resources.