BEYUK KESIK, Oct 16: The leaders of Azerbaijan and Georgia linked their pipelines in a grand ceremony on Saturday, marking another stepping stone to the day oil will flow from the Caspian Sea to eager Western markets.

Welders connected the Azeri-Georgian link of the Baku-Tbilisi-Ceyhan (BTC) pipeline that will next run through Georgia to the Turkish port of Ceyahn.

"Today is a historic day. The oil pipeline has united two brotherly nations," Azeri President Ilkham Aliyev said. "The whole region needs this pipeline. It will bring great financial wealth and help restore regional security."

Georgian President Mikhail Saakashvili, in apparent reference to Russia which opposed the US-backed pipeline, said that "certain forces tried to block this project, but failed.

"I have no false illusions that this one pipe will be able to solve all of our problems, but this is a start," Saakashvili said.

"This pipeline marks a major step toward the independence of both Georgia and Azerbaijan," two nations that have enjoyed friendly ties in a the restless Caucasus region, Saakashvili said.

Officials said the Azeri part of the pipe would be filled with oil by January.

The Georgian part of the pipeline is due to be completed in March 2005 and the rest should theoretically be completed by the end of next year, at a cost of 2.95 billion dollars (2.36 billion euros).

When operational, the BTC pipeline will pump up to one million barrels of oil a day. The project is being led by British oil giant BP, with backing from the US government.

Russia had proposed a different pipeline that would run through its own territory, allowing Moscow to profit from transfer fees and to keep on eye on a Caucasus region it that fears is increasingly coming under US control.

Environmental lobby groups meanwhile have expressed their own concerns that the pipeline is an ecological risk, saying that an oil spill where it runs near the Borjomi valley, the site of world-renowned mineral water spring, could have disastrous consequences.

BP insists that the pipeline meets internationally accepted safety standards and points to extra safeguards built in at the Borjomi section.-AFP