A trilateral meeting that took place in Moscow last week brought the news of a push forward in the long anticipated project of the Bourgas-Alexandroupolis oil pipeline.
An intergovernmental memorandum on building the oil pipeline that would connect Bourgas in Bulgaria and Alexandroupolis in Greece will be signed by March 15, the Russian news agency ITAR-TASS reported on January 28, quoting Greece’s deputy minister of development George Salagoudis.
Speaking after a session of representatives of Russia, Bulgaria, and Greece in Moscow, Salagoudis said another trilateral meeting will be held in Moscow on March 9-10 to discuss the project’s feasibility and the competitive capacity of the future pipeline, which will carry Russian oil via Bulgaria to Greece.
Russia was represented at the meeting by the head of the fuel and energy complex department of Russian ministry of industry and energy Anatolii Yanovskii, and Bulgaria – by the head of the political office of the Minister of Regional Development and Public Works – Kalin Rogachev. Also present were representatives of companies, interested in taking part in the construction of the pipeline.
The conclusions will then be presented to the three countries’ governments in order to make a joint decision, sign a memorandum, and determine the funding scheme, Salagoudis reportedly said.
As Salagoudis said, several important agreements were reached in the course of the consultations held in Moscow. “First of all, it is the establishment of an initiative group of companies to form an international company to carry out the project,” he said.
According to him, such companies-initiators as TNK-BP, PIK TISE and Stroitransgaz were represented from the Russian side, and Hellenic Petroleum, the Latsis Group consortium, and Prometheus Gas S.A. – from the Greek side.
“The Bulgarian side stated that the official presentation of the Bulgarian companies-initiators would take place after the signing of the inter-governmental memorandum,” Salagoudis said.
He recalled that the cost of the Bourgas-Alexandropoulis oil pipeline project is estimated at approximately $700 million, and the feasibility study of the project exists in two versions.
The first variant envisages construction of an oil pipeline with a capacity of 35 million tons of oil a year, and the second – up to 50 million tons annually.
“As for the national belonging of oil, all countries, first of all certainly the countries of the Black Sea basin, are invited to participate,” Salagoudis said.
The progress on Bourgas-Alexandroupolis has been slow since the plan was first announced nearly five years ago, but the visit of the Greek and Bulgarian delegations to Moscow last week and the appointment of TNK-BP as coordinator may mark more active work on the link.
The Bosporus is the only gateway to the Black Sea and many of Russia’s largest oil-exporting ports. With 2.9 million barrels of Russian and Caspian oil passing through the straits each day, the route is running at capacity and prone to expensive delays and bad weather.
Turkey is bound by a 1936 convention to guarantee free passage though the waterways for commercial vessels but has restricted the passage of tankers more than 200 meters long to daytime only, citing growing safety and pollution concerns. Ankara has repeatedly urged oil exporters such as Russia to find other routes in order to reduce chronic congestion.
TNK-BP has already successfully coordinated another foreign pipeline project for Russia – the reversal of Ukraine’s Odessa-Brodi link to pump Russian crude oil to the Black Sea.
That proposal met strong resistance from some Ukrainian officials keen instead to ship Caspian crude oil from the Black Sea to Europe, but TNK-BP lobbied hard and is now a major shipper on that route.
While the negotiations on Bourgas-Alexandroupolis have been very slow, Russia is also proposing another alternative route. This would see a pipeline from Kiyikoy on Turkey’s Black Sea coast to Ibrikbaba on Turkey’s Gulf of Saros in the Northern Aegean. According to preliminary estimates, this route would be much shorter than Bourgas-Alexandroupolis and would give Russia the same access to the Mediterranean. Experts also claim this project would be much more cost-effective. It would also involve only one other country – Turkey.
Yet, sacrificing the Bourgas-Alexandroupolis pipeline in favour of Kiyikoy-Ibrikbka would impact Moscow’s relationship with Sofia and Athens, because the alternative pipeline bypasses both Bulgaria and Greece.
With oil prices reaching new heights and greater demand to secure non-OPEC supplies, the Russians know they have the upper hand when it comes to the Bourgas-Alexandroupolis pipeline project.
However, it looks as if a decision could be reached if a compromise can be made on equity stakes, tax and land concessions, and maybe the Belene power plant construction, where Russian companies want to have some serious participation. Yet it is ultimately for Moscow to decide how it wants to use its oil bargaining power to promote its geostrategic goals in South-Eastern Europe.
An intergovernmental memorandum on building the oil pipeline that would connect Bourgas in Bulgaria and Alexandroupolis in Greece will be signed by March 15, the Russian news agency ITAR-TASS reported on January 28, quoting Greece’s deputy minister of development George Salagoudis.
Speaking after a session of representatives of Russia, Bulgaria, and Greece in Moscow, Salagoudis said another trilateral meeting will be held in Moscow on March 9-10 to discuss the project’s feasibility and the competitive capacity of the future pipeline, which will carry Russian oil via Bulgaria to Greece.
Russia was represented at the meeting by the head of the fuel and energy complex department of Russian ministry of industry and energy Anatolii Yanovskii, and Bulgaria – by the head of the political office of the Minister of Regional Development and Public Works – Kalin Rogachev. Also present were representatives of companies, interested in taking part in the construction of the pipeline.
The conclusions will then be presented to the three countries’ governments in order to make a joint decision, sign a memorandum, and determine the funding scheme, Salagoudis reportedly said.
As Salagoudis said, several important agreements were reached in the course of the consultations held in Moscow. “First of all, it is the establishment of an initiative group of companies to form an international company to carry out the project,” he said.
According to him, such companies-initiators as TNK-BP, PIK TISE and Stroitransgaz were represented from the Russian side, and Hellenic Petroleum, the Latsis Group consortium, and Prometheus Gas S.A. – from the Greek side.
“The Bulgarian side stated that the official presentation of the Bulgarian companies-initiators would take place after the signing of the inter-governmental memorandum,” Salagoudis said.
He recalled that the cost of the Bourgas-Alexandropoulis oil pipeline project is estimated at approximately $700 million, and the feasibility study of the project exists in two versions.
The first variant envisages construction of an oil pipeline with a capacity of 35 million tons of oil a year, and the second – up to 50 million tons annually.
“As for the national belonging of oil, all countries, first of all certainly the countries of the Black Sea basin, are invited to participate,” Salagoudis said.
The progress on Bourgas-Alexandroupolis has been slow since the plan was first announced nearly five years ago, but the visit of the Greek and Bulgarian delegations to Moscow last week and the appointment of TNK-BP as coordinator may mark more active work on the link.
The Bosporus is the only gateway to the Black Sea and many of Russia’s largest oil-exporting ports. With 2.9 million barrels of Russian and Caspian oil passing through the straits each day, the route is running at capacity and prone to expensive delays and bad weather.
Turkey is bound by a 1936 convention to guarantee free passage though the waterways for commercial vessels but has restricted the passage of tankers more than 200 meters long to daytime only, citing growing safety and pollution concerns. Ankara has repeatedly urged oil exporters such as Russia to find other routes in order to reduce chronic congestion.
TNK-BP has already successfully coordinated another foreign pipeline project for Russia – the reversal of Ukraine’s Odessa-Brodi link to pump Russian crude oil to the Black Sea.
That proposal met strong resistance from some Ukrainian officials keen instead to ship Caspian crude oil from the Black Sea to Europe, but TNK-BP lobbied hard and is now a major shipper on that route.
While the negotiations on Bourgas-Alexandroupolis have been very slow, Russia is also proposing another alternative route. This would see a pipeline from Kiyikoy on Turkey’s Black Sea coast to Ibrikbaba on Turkey’s Gulf of Saros in the Northern Aegean. According to preliminary estimates, this route would be much shorter than Bourgas-Alexandroupolis and would give Russia the same access to the Mediterranean. Experts also claim this project would be much more cost-effective. It would also involve only one other country – Turkey.
Yet, sacrificing the Bourgas-Alexandroupolis pipeline in favour of Kiyikoy-Ibrikbka would impact Moscow’s relationship with Sofia and Athens, because the alternative pipeline bypasses both Bulgaria and Greece.
With oil prices reaching new heights and greater demand to secure non-OPEC supplies, the Russians know they have the upper hand when it comes to the Bourgas-Alexandroupolis pipeline project.
However, it looks as if a decision could be reached if a compromise can be made on equity stakes, tax and land concessions, and maybe the Belene power plant construction, where Russian companies want to have some serious participation. Yet it is ultimately for Moscow to decide how it wants to use its oil bargaining power to promote its geostrategic goals in South-Eastern Europe.
