Bermuda-registered Flag Ltd. has finalised construction and finance agreements to build the world's longest fibre-optic submarine cable.

The cable, will link telecommunication's carriers in Europe, the Middle East and Asia with a record 27,000 kilometres of fibre, Bloomberg business news said.

The FLAG (Fibre-optic Link Around the Globe) cable system will take 27 months to build at a cost of $1.5 billion.

The system, connecting three continents and link centres from the UK to Japan, is scheduled to go into service on September 6, 1997.

The latest addition to the undersea route is China.

FLAG Ltd. said yesterday it had reached an agreement with the Chinese Directorate General of Telecommunications to land the cable in Shanghai.

The new landing point will make FLAG the fist international submarine telecommunications cable to serve China.

Over 40 carriers have signed agreements to purchase capacity on the FLAG cable.

A proposed Bermuda fibre-optic spur, to be built by TeleBermuda, linking the Island to the Canada/US CANUS cable could open up the FLAG cable to Bermuda.

The CANUS is linked to the trans-Atlantic cable, the CANTAT.

The CANTAT will connect with the FLAG in the UK.

On July 3, sponsors based in the US, Japan, Saudi Arabia, Hong Kong and Thailand finalised the agreements to build FLAG.

"FLAG is one of the most expensive projects our industry has ever undertaken both in terms of its global reach and the capacity it will make available to telecommunications carriers on demand, said FLAG Ltd. chairman and CEO Mr.

Joseph Timpanaro.

Work is to start immediately on the landing sites and manufacturing of equipment while cable laying is anticipated to commence in November.

NYNEX is the managing sponsor of FLAG.