Russia, Bulgaria and Greece have entered into a long-awaited deal to build an oil pipeline transporting Russian oil to a port in Northern Greece. The 280-km pipeline will transport crude oil from Bulgaria’s Black Sea port Burgas to Greek Port Alexandroupolis. The $1.3 billion oil pipeline would bypass the crowded Bosporus in Turkey. The agreement also marked the conclusion of a long-debated project that would increase oil supplies to Europe. This pipeline will help to gain Russia greater control over more of the Continent’s energy infrastructure.
The pipeline project will start construction next year and is expected to be completed in 2011. The pipeline will pump 35 million tons of crude oil a year to start with and have the potential to rise to 50 million tons per year. Under the arrangements of the deal Russian firms will control a 51 percent stake in the venture, including infrastructure like pumping stations, storage facilities, whereas Bulgaria and Greece will share the remaining 49 percent. The negotiations for this pipeline bypassing the congested Bosporus Straits originated 15 years back.
The Burgas-Alexandroupolis route was first proposed in the early 1990s. It will compete with the U.S.-backed Baku-Ceyhan route, which avoids Russia entirely. Speaking on the occasion Russian president Vladimir Putin said, ‘the implementation of this project increases stability not only for the Balkans but also for the entire world. It provides the possibility to expand supplies of energy to world markets.’
Russian oil producers Rosneft and Gazprom Neft and pipeline monopoly Transneft will now share 51 per cent of the pipeline, ensuring Russia is in controlling seat. The new agreement comes a year after a competitor pipeline was completed between Azerbaijan and Turkey, which was increasingly viewed as a US-backed attempt to reduce Russia’s domination as the region’s chief energy supplier.
