Greek, Bulgarian and Italian companies signed an agreement on Tuesday to build a 160km pipeline that would end Bulgaria’s reliance on Russia for its natural gas.

The €120m ($167m, £103m) link, to be completed in 2012, would give Bulgaria access to the ITGI pipeline carrying gas from Azerbaijan to Turkey and Greece and which is to be extended to Italy. It would provide an alternative source of gas for Bulgaria, the European Union member state hardest hit by the hiatus in ­supply as the result of a dispute between Russia and Ukraine in January.