London, June 26: British and Russian ministers today signed a major agreement on the proposed construction of an undersea pipeline to bring Russian gas supplies to Britain. The "memorandum of cooperation" was signed here by British junior trade minister Stephen Timms and Russian energy minister Igor Yusofov in front of British prime minister Tony Blair and visiting Russian president Vladimir Putin. It covers the planned construction of a multibillion- dollar pipeline by Russian gas giant Gazprom under the Baltic sea to Germany, and then on to Britain. The document was signed at the start of a so-called "Energy Summit" in central London, on the third day of Putin's ongoing state visit to Britain. Earlier a separate commercial agreement was sealed between British oil group BP and Russia's TNK for a joint venture in Russia worth USD 6.15 billion.

Blair hailed the planned pipeline as a concrete sign of improved ties between the nations.

"When that (the pipeline) is constructed, that is going to bind together in visible, very real terms, not just Europe and Russia but Britain and Russia", he said at the summit."

Putin also praised the deal.

"It will create beneficial conditions for an efficient and competitive development of European energy as a whole", he said.

The two governments also agreed to cooperate more closely on wider energy issues, including in energy security and environmental issues, according to a statement by Britain's trade ministry.

Bureau Report