Turkmenistan signs Nabucco supply deal

Turkmenistan has signed a landmark deal granting Caspian Sea gas exploration and extraction rights to a member of the Nabucco pipeline consortium, AFP said citing state media.

Turkmenistan signed the contract with German firm RWE, a member of the Nabucco project which is seeking to build the pipeline to transport Central Asian gas to Europe on a route which bypasses Russia.

The two sides signed a memorandum regarding the deal in April, which the freshly-inked contract cements.

"The contract was signed in the seaside city of Turkmenbashi in the presence of the president of Turkmenistan, Gurbanguly Berdymukhamedov," the Neutral Turkmenistan state-run daily reported.

"(RWE) received a license for exploration work on block 23 for a length of six years. Upon detection of hydrocarbons in the block a license for industrial extraction for a period of 25 years will be given to the operator."

Moscow has a virtual monopoly on the export of Turkmen gas through its state-run energy giant Gazprom, but there have been signs of strain recently between the two ex-soviet countries.

The announcement comes one week after Berdymukhamedov said his country was prepared to pump gas into the proposed Nabucco project - a rival to Russia's South Stream project. Nabucco is aimed at breaking the Kremlin's monopoly on Caspian energy exports.