Two EU countries agree to ensure oversight will come from the "territory and territorial sea of the member state where the first interconnection point is located," according to a copy of the draft obtained by AFP.

France and Germany have struck a compromise allowing Berlin to remain the lead negotiator with Russia on the Nord Stream II gas pipeline to Europe, a proposed deal showed Friday.

France had said it would support European Union oversight of new offshore energy pipelines in a move that could have crippled the undersea pipeline plans between Russia and Germany.

But the two EU countries have now agreed to ensure oversight will come from the "territory and territorial sea of the member state where the first interconnection point is located," according to a copy of the draft obtained by AFP.

Work has already started on the pipeline from Russia under the Baltic Sea to the end-point in Greifswald, Germany.

The draft text replaces the older wording stating the EU rules on gas imports will be applied by "the territory of the member states" and or the "territorial sea of the member states".

The draft compromise was submitted to a meeting of the EU ambassadors discussing a revision of gas market rules for the 28-nation bloc, diplomats said.

Nord Stream 2 faces opposition from many countries in eastern and central Europe, the United States and particularly Ukraine because it risks increasing Europe's dependence on Russian natural gas.

Combined with the planned TurkStream pipeline across the Black Sea, Nord Stream 2 would mean Russia could also bypass Ukraine in providing gas to Europe, robbing Moscow's new foe of transit fees and a major strategic asset.

The draft compromise addressed the concerns saying: "We consider a (gas rules) directive in this spirit indispensable for a fruitful discussion on the future gas transit through Ukraine."

A French diplomatic source had told AFP on Thursday Paris was "not for or against Nord Stream 2".

But the source said France sought "guarantees for the security of Europe and for the security and stability of Ukraine".

German Chancellor Angela Merkel has so far insisted that the pipeline is a "purely economic project" that will ensure cheaper, more reliable gas supplies.

Construction has already begun, involving companies such as Germany's Wintershall and Uniper, Dutch-British Shell, France's Engie and Austria's OMV.