Russia, Turkmenistan and Kazakhstan have signed a landmark deal to build a gas pipeline.
The new pipeline will carry gas through Kazakhstan to Russia
The pipeline will strengthen Moscow's control over Central Asian energy export routes, analysts said.
It also deals a blow to European Union hopes of securing alternative routes that would bypass Russia.
The pipeline will skirt the Caspian Sea from Turkmenistan to southern Russia via Kazakhstan and will be built by the end of 2010.
The trilateral agreement was signed in Moscow in the presence of President Vladimir Putin of Russia and President Nursultan Nazarbayev of Kazakhstan.
The agreement will likely disappoint the US and the EU, which have been lobbying for a rival pipeline to be built under the Caspian Sea, analysts said.
The EU wanted a rival pipeline under the Caspian Sea
They had hoped to pipe Turkmen gas across the Caspian Sea via Turkey, in order to reduce the EU's dependence on Russian-controlled energy.
The EU relies on Russia for about a quarter of its gas consumption.
Prospects for pipelines under the Caspian have been clouded by high costs, environmental concerns and disputes over ownership of the sea resources.
"This is a very important agreement for the energy industries of our countries as well as for Europe's energy," President Putin told reporters.
The deal follows a preliminary agreement reached in May.
The pipeline will export 20 billion cubic metres of gas a year - enough to cover the demand of a country such as France for almost half a year.
Other countries are also seeking access to the resource-rich region and work has begun on building another gas pipeline from Turkmenistan to China.