PREVIEW-Nabucco transit deal nice, but where's the gas?

* Intergovernment signing on Monday July 13

* Ankara agreement will not solve Nabucco supply issue

* South Stream edges ahead but rivalry complex

* Nabucco financing better in the long run

* here

By Sylvia Westall and Orhan Coskun

VIENNA/ANKARA, July 9 (Reuters) - A transit deal for the Nabucco gas pipeline will bring political fanfare at its signing next week but critical supply and financing questions may thwart progress as a rival Russian plan edges ahead.

The Vienna-based Nabucco consortium aims to reduce Europe's energy dependence on Russia by transporting gas from the Caspian and Middle East through the planned pipeline from 2014.

Some analysts say Nabucco has better prospects than Russia's South Stream pipeline in the long run but that the consortium, hampered by competing interests of its member companies in six states, lacks assurances and momentum to get suppliers on board.

"The major obstacles to Nabucco still stand and supply is number one," said analyst Ana Jelenkovic at Eurasia Group.

"Without securing the supplies you can't have the pipeline but without the pipeline you can't secure the supplies. They don't actually have anything (on supply) signed."

Transit countries Turkey, Bulgaria, Romania, Hungary and Austria will sign an accord on July 13 in Ankara. While it may help financing and reassure supplier countries, it will not be a big leap forward for a project already subject to delays.

A final financing decision for the pipeline, due next year, will be a solid step but this also depends on the supply issue.

Nabucco wants to pump 31 billion cubic metres of gas to Europe annually to meet some 5 percent of gas needs. It could ship gas from Iraq, Egypt, Iran, Azerbaijan and possibly Russia and Turkmenistan.

Iraq's Kurdistan in May heralded a plan to export gas from the semi-autonomous region through Nabucco but the central government rejected the scheme. [ID:nLI484521]

South Stream project moved forward earlier this month when Azerbaijan promised Russia's Gazprom (GAZP.MM) priority in buying gas from the second phase of the major Shakh Deniz project.