Russia agreed to build a new pipeline to import more natural gas from Turkmenistan, bolstering its dominant hold on supplies to Europe and heading off a competing United States-backed plan that would bypass Russian territory, Bloomberg News reported on Saturday.

Russian President Vladimir Putin met his counterparts from Turkmenistan and Kazakhstan on Saturday, and a final agreement will be signed by September 1, the report said. The three leaders also agreed to improve an existing pipeline, part of which runs through Kazakhstan, Putin said in comments broadcast on Russian television. The combined project will boost supplies 40 percent.

Russia relies on imports from Turkmenistan to meet its energy export obligations to Europe, where it sells its own gas for more than twice what it pays for Turkmen supplies. Russia is also seeking to head off a rival US plan for a Trans-Caspian pipeline that would lessen Europe's dependence on Russia.

"Russia will have first call on Turkmen gas," Roland Nash, head of research at Moscow-based brokerage Renaissance Capital, said via telephone. Turkmenistan may still use the US-proposed pipeline as a "bargaining chip" to persuade Russia to pay more for the gas, he said.

The new pipeline agreements will increase capacity about 20 billion cubic meters a year by 2012, Putin said in comments broadcast from Turkmenistan's Caspian port city of Turkmenbashi. Russia state media said the new pipeline would cost US$1 billion, compared with US$10 billion for the US-backed alternative.

Russia already buys about 50 billion cubic meters a year, equal to four-fifths of Turkmenistan's production. It buys the gas at US$100 per 1,000 cubic meters and sells its own production to Europe for US$255. Russia's gas export monopoly OAO Gazprom supplies about a quarter of Europe's gas needs.

Construction of the new pipeline, which would go along the coast of the Caspian Sea through Kazakhstan to Russia, is scheduled to start in the second half of next year, the three leaders said in a joint statement issued through Interfax.

Turkmen President Gurbanguly Berdymukhammedov said the US-backed pipeline project is still "on the table," in comments broadcast by Russian state television. The pipeline would run from Turkmenistan to Europe via Azerbaijan, Georgia and Turkey.

"Keeping the door to the US is sensible for Turkmenistan, but the country is in Russia's backyard," Nash said.

Turkmenistan, which borders Afghanistan and Iran, signed a 25-year agreement on deliveries with Gazprom in 2003.

Gazprom Chief Executive Officer Alexei Miller said the new pipeline agreement should eventually allow Russia to buy 80 billion cubic meters of Turkmen gas a year. The pipelines may also increase imports from Uzbekistan and Kazakhstan, he said in comments reported by Interfax.