(Start of meeting, background)

ANKARA (AFP)--The leaders of four European Union countries and Turkey gathered here Monday to sign a landmark deal to build a gas pipeline reducing European reliance on Russia amid lingering questions on who will supply the gas.

Turkish Prime Minister Recep Tayyip Erdogan was hosting the gathering, attended also by his counterparts from Austria, Bulgaria, Hungary and Romania, through which the 3,300-kilometer Nabucco pipeline would pass.

The project, long delayed by lack of commitment from suppliers, is planned to become operational in 2014 at an estimated cost of EUR7.9 billion, with a capacity to pump 31 billion cubic meters of gas from the Caspian Sea to Austria via Turkey and the Balkans, bypassing Russia.

In a sign of the importance attached to the project, European Commission chief Jose Manuel Barroso, Prime Minister Nouri al-Maliki of potential supplier Iraq and U.S. special envoy for Eurasian energy Richard Morningstar attended the gathering.

A quarter of all natural gas used in Europe currently comes from Russia, with several southern European countries depending almost exclusively on Russian supplies.

The Nabucco projects aims to avoid a repetition of the cutoffs which have recently disrupted supplies to Europe amid freezing temperatures.

It is in direct competition with Russia's South Stream which will carry Russian gas through Bulgaria to Western Europe under the Black Sea.

Nabucco's primary potential supplier Azerbaijan, represented by its energy minister at Monday's meeting, insists it has enough reserves for the conduit, but last month it signed a deal to export gas to Russia starting in 2010, raising concerns among Nabucco proponents.

The project appeared to get a boost Friday when Turkmenistan President Gurbanguly Berdymukhamedov said his country was prepared to supply Nabucco with gas.

Officials say the signing of the intergovernmental agreement Monday would serve to boost the project's credibility and lead gas exporters to think seriously about supplying the pipeline.

Two European banks have expressed readiness to finance the project, but analysts say securing the cost could be difficult amid the global economic slowdown and uncertainty over suppliers.

Monday's signing "is a very significant achievement... (but) we have to recognize that there is still a lot of work to be done," Morningstar told reporters ahead of the meeting.

The signing of the agreement has been delayed also by Turkish demands to use 15% of Nabucco's gas for domestic use or even for re-export.

E.U. officials said Ankara's concerns were to be addressed by an arrangement, under which the pipeline would operate both ways, giving Turkey access to European stockpiles in times of need.

The pipeline's shareholders are Austria's OMV AG (OMV.VI), Germany's RWE.AG (RWE.XE), MOL Nyrt (MOL.BU) of Hungary, Transgaz of Romania, Bulgargaz of Bulgaria and Botas of Turkey.