Burgas-Alexandroupoli pipeline

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Map of the Burgas-Alexandroupoli oil pipeline
Map of the Burgas-Alexandroupoli oil pipeline

The Burgas-Alexandroupoli pipeline is an oil pipeline that will be used to transport Russian and Caspian oil from the Bulgarian Black Sea port of Burgas to the Greek Aegean port of Alexandroupoli. The pipeline will be an alternative route for Russian oil bypassing the Bosporus and the Dardanelles. Its construction will begin in 2008, and is estimated to be completed by the beginning of 2011.[1][2]

Contents

[edit] History

The pipeline project was proposed in 1993–1994 by several Russian and Greek companies.[3] In 1994, for construction of pipeline Greece and Bulgaria signed a bilateral agreement, followed by a memorandum of cooperation, signed by Greece and Russia.[4]

In February 1998, a Greek consortium for pipeline construction named Bapline was established, and in May 1998, a memorandum of creation of the Transbalkan Oil Pipeline Company was signed.[4] In 2000, a technical specifications and an economic evaluation of the project were prepared by the German company ILF.[3]

A joint protocol for preparing the pipeline's construction was signed by the three countries in January 2005.[5] The political memorandum between governments was signed on 12 April 2005.

In May 2006, there was a controversy in the media regarding the Bulgarian government's alleged withdrawal from the project, but this has been denied later by Bulgarian officials.[6]

An inter-governmental agreement on the project was agreed on 7 February 2007, and it was signed on 15 March 2007 in Athens, by the involved ministers of the three countries, under the presence of their leaders, Vladimir Putin (Russian president), Sergey Stanishev (Bulgarian prime-minister), and Kostas Karamanlis (prime-minister of Greece).[7][8][2]

[edit] Technical features and financing

The pipeline with a diameter of 900 mm (36 inch) will be 279 km long, and it would transport 15-23 million tons of oil per year during the first phase, as well as 35 million during the second.[3] The pipeline would have three oil refilling stations, two of which in Bulgaria (the first one at Neftochim close to Burgas) and one at Alexandroupoli. The project will also include reconstruction of Burgas and Alexandroupoli terminals, as also oil tanks with a capacity of 600,000 tons in Burgas, and with a capacity of 1,200,000 tons in Alexandroupoli.

The pipeline is expected to cost up to 1 billion Euros.[9][2] The investment scheme is not agreed yet, and it’s not decided from which sources the pipeline will be filled.[10]

[edit] Shareholders

The pipeline will be constructed and owned by the International Project Company, in which 51% of shares would be given to the Burgas-Alexandroupolis Pipeline Consortium, a joint venture of Russian Transneft, Rosneft and Gazprom Neft.[8] Remaining 49% of shares will be distributed between Bulgargaz and Terminal Universal Burgas from Bulgaria, and Bapline consortium, a joint venture of Hellenic Petroleum and Thraki from Greece.[7] There are speculations that the part of Bulgarian and Hellenic stakes could be sold to other oil companies as Chevron, TNK-BP and KazMunayGas.[10] Also Andrei Dementyev, a deputy industry and energy minister of Russia, has proposed that Kazakhstani KazMunayGas and other shareholders of the Caspian Pipeline Consortium could be get a stake in the pipeline project.[11]

The ownership of the Burgas oil terminal remains unclear. Bulgarian opposition has demanded to scrap the deal if Russian companies are granted control over the terminal.[7]

[edit] Controversy

There are several competitive pipeline projects, such as the AMBO pipeline from Burgas to Vlore, Pan-European Pipeline from Constanţa to Trieste, Odessa-Brody-Plotsk pipeline, Kiykoy-Ibrice pipeline, and Samsun Ceyhan pipeline – all aimed to transport oil from the Black Sea bypassing Turkish straits.[12] The project of the Burgas-Alexandroupoli pipeline is described as one of the shortest pipeline through a plain terrain and therefore to be one of the cheapest and cost effective.[12] The critics of the the Burgas-Alexandroupoli pipeline project have raised environmental concerns because of oil tankers traffic in the Aegean Sea, which contains numerous submerged rocks and island populations dependent on tourism and fishing.[13] It has been mentioned that a possible oil spill in the Aegean would be devastating for Greece's tourism industry.[14]

[edit] See also

[edit] References

  1. ^ (Greek) Flash.gr news site, Ιστορική Συμφωνία (Historical Agreement), 2007-03-15, Retrieved on 2007-03-15
  2. ^ a b c (Greek) In.gr news site, Υπεγράφη η συμφωνία για την κατασκευή του αγωγού Μπουργκάς-Αλεξανδρούπολη (The agreement on the construction of the Bourgas-Alexandroupoli pipeline was signed), 2007-03-15, Retrieved on 2007-03-15
  3. ^ a b c Transneft website. Burgas-Alexandrupolis Pipeline Project. Visited 15 February 2007.
  4. ^ a b Bridge Magazine. Everybody wins !!!, by Peggy Papakosta, a political scientist and special adviser to the Greek minister of development. Visited 15 February 2007.
  5. ^ Embassy of Greece to the United States. Greece, Russia, Bulgaria move closer to building Burgas-Alexandroupoli pipeline, 29 January 2005. Visited 7 May 2006.
  6. ^ Today's Home News. Greek FM: Bulgaria still partner in Burgas-Alexandroupoli pipeline, 7 May 2006. Visited 15 February 2007.
  7. ^ a b c Associated Press. Bulgaria, Greece, Russia finalize details on long-awaited pipeline deal, 7 February 2007. Visited 14 February 2007
  8. ^ a b RBC Daily. Burgas-Alexandroupolis project getting underway, but many questions remain, 8 February 2007. Visited 15 February 2007
  9. ^ International Herald Tribune. Russia agrees to speed up Balkan oil pipeline project, 4 September 2006. Visited 23 September 2006.
  10. ^ a b RBC Daily. Burgas-Alexandroupolis project getting underway, but many questions remain, 8 February 2007. Visited 15 February 2007
  11. ^ RIA Novosti. Russia makes proposal on final trans-Balkan pipeline agreement, 21 November 2006.
  12. ^ a b Bapline. Why the Burgas-Alexandroupolis pipeline?, presentation by Christos Dimas, Emerging Europe Energy Summit 3-4 November 2005. Visited 15 February 2007
  13. ^ Bankwatch Mail 27. Time to wake up from South-East Europe’s pipeline dreams. 3 March 2006. Visited 15 February 2007
  14. ^ Balkananalysis.com. AMBO Trans-Balkan Pipeline Agreement Finally Signed, 29 December 2004. Visited 15 February 2007
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