Russian President Vladimir Putin and Bulgaria’s Prime Minister Sergei Stanishev will attend the signing in Athens this morning of a long-delayed Balkan oil pipeline deal with Greece that will ensure the flow of cheaper Russian crude to the Mediterranean.
Ending almost 15 years of negotiations that often saw the ambitious deal on the brink of collapse, the three nations have set aside differences to allow construction of the 279-kilometer (174-mile) pipeline to begin.
The pipeline between the Bulgarian Black Sea port of Burgas and the Greek Aegean Sea port of Alexandroupolis, estimated to cost about $1 billion, will speed up oil transportation by bypassing the congested Turkish Bosporus, where tanker delays are costing oil companies nearly $1 billion a year.
Its capacity will be 35 million tons of crude oil annually, which can be potentially increased to 50 million tons.
The longest segment of the pipeline, construction of which is projected to start in 2008, will be on Bulgarian soil (161 kilometers), and the remaining part in Greece.
‘Historic moment’
“For our country and the Greek people this is an historic moment,” Greek Development Minister Dimitris Sioufas said yesterday. “The significance of this project is obvious for all... The construction and operation of this pipeline will allow Greece and Bulgaria to enter the global energy map,” he said.
The deal will be signed by Sioufas, Russia’s Minister for Industry and Energy Viktor Khristenko and Bulgaria’s Regional Development and Public Works Minister Asen Gagauzov.
The pipeline is also seen as further strengthening Russia’s influence in the European energy market, a move viewed with suspicion by the United States.
Oil producers Rosneft and Gazprom Neft and crude oil pipeline monopoly Transneft will now share 51 percent of the pipeline, ensuring Russia is in command. Greece and Bulgaria will share the remaining 49 percent in equal parts.
Sofia’s stake will be handled by state firms Bulgargaz and Transexportstroy, but it could sell part or all of its share to oil majors such as KazMunaiGas or Chevron.
Greek firms Hellenic Petroleum, Latsis Group and the Greek unit of Gazprom, Petroleum Gas, will participate.
The pipeline will rival the new $4 billion Baku-Ceyhan pipeline from Azerbaijan to the Mediterranean that bypasses Russian soil and will pump 300,000-400,000 barrels per day of Azeri crude to world markets by year-end, rising to a million bpd in 2008.
Greece hopes the project will turn it into a regional energy hub, especially after a Turkish-Greek-Italian pipeline pumping natural gas from Central Asia to energy-hungry Europe is due to start operating by early next year. Russia is also keen to use this gas pipeline.
Responding to a question on whether the project undermines EU efforts to maintain a united stand on energy issues vis-a-vis Russia, Energy Commissioner Andris Piebalgs said in Brussels that the importance of this agreement lay in the fact that the interested EU parties were speaking with one voice through Russia.
(Kathimerini, Reuters)