"We have reached the deal and we may sign it shortly as all the problems had been solved. (Nigerian Oil Minister Rilwany) Lukman and myself will sign it," Chakib Khelil told Algerian state television.

"We would not have any problem to finance the project," he added.

The project, with capital costs estimated at $10 billion for the pipeline and $3 billion for gathering centres, would send up to 30 billion cubic metres a year of gas to Europe via a 4128-kilometre pipeline from Nigeria via Niger and Algeria.

Russian gas monopoly Gazprom , France's Total and Anglo-Dutch energy giant Royal Dutch Shell are among the international firms to have expressed interest in taking part in the project.

The Movement for the Emancipation of the Niger Delta (MEND), which has shut down more than a fifth of Nigerian oil output since launching attacks on the industry three years ago, has warned that the planned project would be a target.

The European Union, which currently relies on Russia for a quarter of its gas and a third of its oil, has said the Trans-Sahara project could help diversify its energy sources.

Beyond the threat of militant attacks in Nigeria, the pipeline would also pass through northern Niger, parts of which are controlled by nomadic Tuareg rebels, and southern Algeria, where Islamic militant groups have long had a presence.

The pipeline has been on the drawing board for years.

Nigeria has estimated natural gas reserves of 180 trillion cubic feet, the seventh largest in the world. Its liquefied natural gas company Nigeria LNG says it already provides 10% of world supply, much of it to Europe and North America.

Published: 08 June 2009 02:20 GMT  | Last updated: 08 June 2009 05:57 GMT