Turkey, Azerbaijan Sign Deal for Pipeline Project

Yildiz was asked how the Trans Anadolu Pipeline project would affect the proposed Nabucco pipeline project, which is slated to transport natural gas from the Caspian and Middle Eastern regions to central Europe through Turkey.

"We are Nabucco's partner and we have 16% share," he was quoted as saying by the state Anadolu news agency. "We have made a hard effort to realize that [Nabucco] project and continue to make efforts. Trans Anadolu Natural Gas Pipeline is an important alternative."

Socar, Azerbaijan's state oil company, last month said it would build a 16 billion-cubic-meter standalone gas pipeline across Turkey to cater to the fast-growing economy's growing energy needs.

Socar also stressed the new pipeline wouldn't mean the end of the European Union-backed Nabucco pipeline project.

However, many analysts and rivals, in particular Russia's gas giant OAO Gazprom (OGZPY, GAZP.RS), have long expressed skepticism that Nabucco would get built. The 3,900-kilometer pipeline would have a capacity of 31 billion cubic meters a year, twice as much gas as Azerbaijan could provide. Other planned sources, including Turkmenistan, Iran and Iraq, remain problematic due to concerns over security and political instability.

The consortium behind Nabucco has repeatedly sought to dispel growing skepticism about the pipeline's viability, and the project has strong political support in Brussels.