Azerbaijan will make good on commitments to supply Bulgaria with 1 billion cubic meters of gas per year, Bulgarian President Georgi Parvanov said this week.

Appearing with Azerbaijani President Ilham Aliyev Monday in Baku, Parvanov said the two countries are ready to make official a deal struck last year to supply that from Azeri gas fields in the Caspian Sea, the Sofia News Agency reported.

The agreement could serve as an example to the European Union how to successfully negotiate energy deals with Azerbaijan as the EU strives to diversify its natural gas supplies from Russia.

"Bulgaria has its place of being a pro-active factor in these energy relations that can overtake the relations between the EU and Azerbaijan with the realization of some of the initiatives that we started long ago," Parvanov said.

Calling the agreement a "small breakthrough," he said it could eventually be of great significance and lead to much more sizable deals in the "southern corridor," including the ambitious Nabucco pipeline proposal and smaller projects to connect Azerbaijani supplies with European customers.

The Sofia-Baku agreement, which is separate from the ongoing negotiations on the EU-sponsored Nabucco pipeline, to which Bulgaria is also a party, could serve "to demonstrate to Europe how things can be done," Parvanov asserted.

The news agency said current plans call for the gas to flow into Bulgaria via Georgia, Turkey and Greece once gas network interconnections between Bulgaria and Greece are ready.

The Bulgarian Energy Holding and Greek utility DEPA have promised to complete the interconnection between Bulgaria and Greece in 2013, a year earlier than the term stipulated in the project's road map, the Sofia Echo reported.

The supplies are also dependent on an agreement between Azerbaijan and Turkey, through the gas would transit.

The gas deal was first proposed last year as part of Bulgaria's long range efforts to diversify its supplies from Russia and was confirmed in September when Bulgarian Economy and Energy Minister Traicho Traikov visited Baku.

"These supplies are important for Bulgaria because they guarantee alternative sources and routes for gas deliveries," Traikov said then. "They are also important for Southeast Europe to create competition that will lead to lower prices for consumers. Azerbaijan is also interested as it finds new markets."

Bulgaria is also hoping the State Oil Co. of Azerbaijan, or SOCAR, will make investments in Bulgarian gas storage facilities, gasification and gas distribution and oil processing facilities, which needed rehabilitation and upgrades, the Echo reported.

Monday's meeting between the Bulgarian and Azeri leaders also yielded cooperation agreements in other areas, including the exchange of confidential information and education, the Azeri Press Agency said.

"Our political relations are at a high level, and such mutual visits are clear evidence of this," Aliyev told Parvanov during their meeting. "Of course, the energy factor is also playing an important part in our relations, our companies are holding negotiations in this sphere.

"We can see successful development in all areas, and I am sure that this positive trend will be continued after your visit," he said.