India and Pakistan Wednesday signed agreements with Turkmenistan for a project to pipe natural gas from the central Asian country through Afghanistan , marking a major milestone in regional relations.

The signing of the gas sales and purchase agreements by state-run GAIL (India) Ltd. (532155.BY) and Pakistan's Inter State Gas System (Pvt) Ltd. in Turkmenistan comes after nearly two decades of negotiations and backing from the U.S. to build the pipeline, commonly referred to as the TAPI pipeline.

Under the agreement, up to 90 million cubic meters a day of natural gas will be transported through the pipeline from the massive Galkynysh field in Turkmenistan , the world's second-largest gas reserve. It will pass through Afghanistan , then Pakistan and end in India .

But security concerns in areas through which the pipeline will pass persist, given that the Taliban controls large areas of southern Afghanistan and parts of the Afghanistan-Pakistan border, while a separatist rebellion continues in Pakistan 's southwestern Baluchistan province. As a result, the timeframe for the pipeline's construction is unclear.

Turkmenistan views the over 1,100-mile-long pipeline as a way to reduce dependence on Russia and China as export markets. The gas will help India and Pakistan meet surging domestic demand for energy while also reducing chronic power shortages in Afghanistan .

On Wednesday, Afghanistan also signed an initial pact with Turkmenistan on long-term gas cooperation.

A gas sales and purchase agreement between Afghanistan and Turkmenistan is expected to be finalized shortly, according to a statement issued by the Asian Development Bank. The Manila-based bank is funding a small part of the project and helped broker the deal.

"The next step is for the four TAPI nations to attract commercial partners to build, finance and operate the pipeline, estimated in 2008 to cost at least $7.6 billion," the ADB said.

The project has the backing of the U.S. , as it wants to isolate Iran , which is trying to build its own gas pipeline to Pakistan , and force it to abandon its alleged program to build nuclear weapons.

Terming the signing of the agreements as a "watershed development", India 's oil minister, Jaipal Reddy, said the TAPI project will boost industrial and economic development in the four countries.

"This (pipeline) will...provide socio-political stabilization in this region," Reddy said at a conference in Turkmenistan .

He said India 's consumption of natural gas is expected to climb from the current 166.2 million metric standard cubic meters a day to 473 mmscm/d in 2017, a fact that is pushing the nation to build more infrastructure for liquefied natural gas and expand pipeline network.

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