* Snam, Fluxys jv looks to integrate EU grids
* Joint venture would combine European gas assets
* EU seeking to diversify gas sources after Ukraine (Recasts lead, adds comment from analysts, executives)
MILAN/BRUSSELS, March 31 Italy's Snam and Belgium's Fluxys have agreed to extend a joint venture to pool gas assets in Europe that could help create a more unified gas market across the continent and make it easier to trade gas.
The move comes at a time when Europe is increasing efforts to reduce its dependence on Russian gas after Moscow's annexation of Ukraine's Crimea region raised the spectre of possible pipeline interruptions.
On Monday Snam and Fluxys said they planned to combine their European infrastructures which include gas transport pipelines, storage facilities and liquefied natural gas (LNG) interests between North Africa to Britain.
They did not disclose financial details.
The venture, which will exclude the Belgian and Italian domestic markets, is a further step towards integrating Europe's patchwork of gas grids and building a network that will create a north-south as well as an east-west gas corridor.
"Being all under one proprietary roof certainly makes it easier to have common and compatible rules," says Paolo Ghislandi, secretary general of AIGET, Italy's association of energy traders and suppliers. "But at the end of the day it's harmonized regulatory rules and access to the pipes that count."
Fluxys and Snam first joined forces in 2012, developing and marketing "reverse flows" transmissions from Italy which will be able technically to ship African gas from Algeria and Libya to the UK.
Flows have typically gone from north to south but the two companies are also working on an east-west gas corridor. Last year Snam and others bought the TIGF gas transport and storage business of France's Total, a deal which could pave the way for Spanish LNG to be pumped across Europe.
Snam, one of Europe's biggest gas transport players, is also in talks with its state-backed main shareholder to buy a majority of the TAG pipeline carrying Russian gas into Italy.
"We're working on reverse flows at our northern borders so we can send gas east. It can help cut dependence on Russian gas," Snam CEO Carlo Malacarne said at a business plan meeting in March.
Italy, Europe's third-biggest gas market after Britain and Germany, is keen to beef up gas transport and storage infrastructure to transform the country into a southern European gas hub and lower gas prices.
"It's good to make the gas sector increasingly European also with a view to cutting prices," the head of Italy's energy regulator Guido Bortoni said on Monday after the memorandum of understanding between the two gas groups was announced.
Fluxys, which owns a majority of stock market listed Fluxys Belgium, the domestic Belgian operator, has stakes in a series of pipelines, reaching down into Italy, across Germany as well as two linking Britain and continental Europe.
It has a stake in the Trans Adriatic Pipeline (TAP) venture that is planning to build a pipeline bringing natural gas from the Caspian region to Europe and which should land in Italy.
Earlier this month Dutch Gasunie's CEO said he saw Fluxys and Germany's Open Grid Europe as potential shareholders.
Fluxys and Snam are already co-shareholders in the Interconnector pipeline between Britain and Belgium. (Additional reporting by Francesca Landini and Giancarlo Navach in Milan; Editing by Mark Potter and Sophie Walker)