Bulgaria pulls out of Burgas-Alexandroupoli pipeline - The Best from Greece

Bulgarian Deputy Prime Minister and Finance Minister Simeon Djankov announced after Wednesday’s Cabinet session in Sophia that Bulgaria was pulling out of the Burgas-Alexandroupoli oil pipeline project.

 

 

The pipeline aimed at connecting the Bulgarian Black Sea port of Burgas with the northern Aegean port town Alexandroupoli, intended to transport Russian oil from the Black Sea to the Mediterranean Sea bypassing the traffic-clogged Bosphorus Straits.

 

The decision is in line with the Bulgarian centre-right government's stance since 2009 when it put on review major Russian-led energy projects and said it would abandon them if they did not match the national interest.

 

Since the election of Boyko Borisov in 2009, the project has been haunted with closure as the government withheld paying its expenses which were 5m euros in 2010.

 

Local political analysts welcomed the move, saying Bulgaria was right to cancel a project that was not beneficial for Sofia and foresaw few repercussions from Russia - its leading gas and oil supplier.

 

"It will probably have some negative effects on Bulgaria, as Russia does not like to be rejected," said Ognian Minchev, an analyst with Institute for Regional and International Studies.

 

"But the project is not key for Moscow. Russia is much more interested to start building a new nuclear plant in Bulgaria and get support for the South Stream gas pipeline project," he said.

 

Last week Bulgaria gave the South Stream gas pipeline the status of a national project and declared it an object of national importance, providing opportunities for the speedy construction of the project. The pipeline is intended to carry up to 63bcm a year of Russian gas across the Black Sea to Bulgaria and then to central and southern Europe.

 

Sofia is proposing Russia and Greece agree to dissolve a 2007 trilateral agreement for building the 300km oil pipeline which would be able to pump up to 50 million tonnes of crude a year from the Black Sea port of Burgas to Alexandroupolis on the Aegean.

 

The European Union's poorest country will walk out of the 1.0 billion euro project alone after 12 months if Athens and Moscow refuse to voluntarily annul the deal, Finance Minister Djankov told reporters after Wednesday’s meeting.

 

"Bulgaria proposes the tripartite intergovernmental agreement for the oil pipeline to be cancelled by mutual consent," he said.

 

"In line with the analyses on the Burgas-Alexandroupolis oil pipeline, it cannot be carried out under the terms of the agreement signed in 2007."

 

A government spokeswoman said an analysis by French bank Societe Generale, which is advising the project company, showed the oil link was not economically and financially viable.

 

The pipeline deal was signed on 15 March 2007 after the project had been touted by successive governments for 14 years. The New Democracy government of Kostas Karamanlis claimed the victory, asserting that the pipeline puts Greece on the energy map.

 

 

Yet the deal also placed Greece in the middle of fiercely competing Russian and American energy interests.

 

Greece, which sees the project as a cornerstone of a strategy to become a transit country for gas and oil flows between Central Asia, Russia and Western Europe, said it was not yet officially informed about Bulgaria's plans.

 

Greek deputy Energy Minister Yannis Maniatis said in a statement that Athens remained firmly committed to the project.

 

The three countries set up a joint venture company for the project: Trans-Balkan Pipeline, in which Moscow holds 51 percent, while Sofia and Athens have 24.5 percent each. The Russian stake is held by Russian oil pipeline monopoly Transneft, its largest crude producer, Rosneft and Gazprom Neft. (Reuters, AMNA, Athens News)