* Oettinger outlines 7 priority corridors for gas, power
* Projects in corridors eligible for funds, faster permits
* Shortlist to be finalised in 2012
BRUSSELS, Nov 17 (Reuters) - Europe's energy chief took the first step on Wednesday towards defining a list of gas and power distribution projects by 2012 that will benefit from public funds and fast-tracked building permits.
Energy Commissioner Guenther Oettinger prioritised four corridors for electricity and three for gas with the aim of binding together the supplies of all 27 European Union countries.
About 200 billion euros ($270 billion) will be needed to make the plans a reality over the next decade, he said.
"We're still using the old territorial limits that existed before the European Union," he told reporters. "Our current infrastructure is ageing rapidly and is no longer in line with the technical possibilities."
By integrating national networks, Oettinger hopes to boost distribution of renewable energy and increase countries' ability to help each other in the event of a crisis, such as the January 2009 cut-off of Russian gas supplies via Ukraine.
The four priority corridors for electricity are: Connecting North Sea wind farms and also the Baltic region with mainland Europe, unblocking the bottleneck between France and Spain and strengthening connections to southeast Europe.
Two of the priority gas corridors run north-south along the eastern and western sides of Europe, and a third aims to carry Caspian gas to central Europe via Turkey.
"Based on these pre-defined corridors, concrete projects of 'European interest' will be identified in 2012, which should benefit from financing and faster building permits, including a time limit for final decision," said a Commission statement.
Utilities were quick to realise the importance of being classed as "of European interest" and the potential gains from streamlined permitting.
"The test will be whether the legislative proposals next year on financing and permitting match the scale and ambition of that vision," said Christian Kjaer of the European Wind Energy Association, whose members include Denmark's Vestas (VWS.CO).
ENTSO-E, which represents 42 power grid operators, said it backed Oettinger's plan "to tackle the barriers hindering development of electricity networks, namely inefficient and slow permitting procedures and access to equity and bond capital for network developers."
(Editing by Jane Baird)