Bulgaria approves deal to back Nabucco gas pipeline

* Nabucco aims to cut Europe's dependence on Russian gas

* Support deal to facilitate financing by private sector

SOFIA, July 21 (Reuters) - The Bulgarian government approved on Wednesday an agreement to support the EU-backed Nabucco gas pipeline aimed at cutting Europe's dependence on Russian gas.

The pipeline, which aims to transport up to 31 billion cubic metres of natural gas a year from the Caspian region to Europe, is expected to become operational at the end of 2014.

The support agreement between Bulgaria and Nabucco's consortium aims to outline legal, regulatory and other details for the construction of the pipeline on Bulgarian territory, the government said.

"The agreement for support is sealed as a way to facilitate financing by the private sector and the realisation of the project," it said in a statement.

Bulgaria's Bulgargaz is one of the shareholders in the Nabucco consortium, which also include Austria's OMV (OMVV.VI), Hungary's MOL MOLB.BU, Romania's Transgaz TGNM.BX, Turkey's Botas and Germany's RWE (RWEG.DE).

Analysts say Nabucco, with a price tag of 7.9 billion euros ($10.20 billion), needs to build momentum this year by signing supply agreements and coming to a final investment decision if it is to be realised.

The Nabucco project faces rivalry from Russia's South Stream gas pipeline project, which aims to bypass Ukraine and cement Russia as key gas supplier to the European markets.

The pipelines are planned to run through Bulgaria and the country says it backs both.

Sofia, almost fully dependent on Russian gas supplies, agreed on Saturday to speed up work on South Stream after Moscow pledged to lower its gas supply prices. [ID:nLDE66G03H] (Reporting by Tsvetelia Tsolova; editing by James Jukwey)