Russian owned Gazprom said on Saturday it had signed a protocol with the Turkish government on extending the gas pipeline to be built between the two countries to supply Turkey with Russian gas and further to reach the EU.
The Russian company said it had agreed with Turkey's Botas to end the arbitration dispute over gas supply terms.
The protocol concerns the ground part of the Turk-Stream gas pipeline, which Gazprom said meant it could start implementation immediately.
Previously, Turkey had delayed issuing a permit to the Russian company to start extending the ground part of the pipelines, which would reduce if completed Moscow's dependence on Ukraine as a transit point for gas supplies to Europe.
A Turkish source said in February that the problem of the permit may be related to talks between Gazprom and Botas on a possible reduction in the price of Russian gas sold to Turkey.
Turkish President Recep Tayyip Erdogan said on Saturday that Turkey and Russia had reached a retroactive agreement and provided a 10.25 percent discount on the price of natural gas purchased by Ankara from Moscow.
In a statement issued on Saturday, Gazprom stated that the dispute with Botas would settle, so the contracts and international agreements between the parties will be agreed on outside the dispute settlement court.