Russia, Greece and Bulgaria secure pipeline deal for 2006

Sep 4, 2006, 17:22 GMT

Athens - Greece, Russia and Bulgaria secured the future on Monday for a long delayed oil pipeline linking the Black Sea to the Aegean, with construction due to begin within 2006.

Greek Prime Minister Costas Karamanlis, Russian President Vladimir Putin and Bulgarian President Georgi Purvanov agreed on the deadline for the construction of an oil pipeline to run from the Bulgarian port of Burgas to the Greek Aegean Sea port of Alexandroupolis.

The leaders said the 900 million euro project would be signed by the three countries before the end of 2006.

'Greece, Russia and Bulgaria agreed to sign a deal to back its construction within 2006,' Karamanlis after a meeting with the two other leaders.

Putin said he 'hoped that the deadline for the implementation of the project we have agreed will materialise...I am convinced this field may become a driving force in Russian-Greek-Bulgarian short- term and long-term cooperation.'

All three leaders said they will assign priority to the creation of new gas transportation systems and will consider new projects in this area.

'We regard reliable energy access as a condition of the dynamic and stable development of civilisation. This may be achieved only if the interests of all members of the energy chain, energy producers, transit countries and consumers are taken into account,' Putin said.

Russia, Greece and Bulgaria first signed a memorandum for the construction of the 280-kilometre pipeline stretching from the Bulgarian port of Burgas, on the Black Sea to Greece's northern Aegean port of Alexandroupolis in April 2005.

The project has been repeatedly stalled since it was first drawn up 13 years ago, namely because the Russians did not believe it could be economically viable.

Experts now believe that with the rise in oil prices, the project could at last become a reality by bringing cheaper Russian crude to the Mediterranean and ensure Moscow's hold on the region's energy market.

For years the three countries have also disagreed on other key issues, namely who would be responsible for building the pipeline, transit fees and ownership of the terminals.

Under the declaration agreed to on Monday, all sides agreed to speed up the creation for an international project team and to sign an intergovernmental agreement to support the pipeline project by year's end.

At a cost of 900 million euros, the Burgas-Alexandroupolis pipeline is designed to reduce the cost and time of transporting Russian oil from the Caspian Sea to Europe and the United States.

Currently thousands of tankers are transporting crude oil across the Bosphorus Straits, but increasing congested traffic over the years has made the task environmentally unsafe.

Once completed, the pipeline would be able to transport some 35 million tons of crude oil a year.

Greece is also participating in a Turkish-Greek-Italian pipeline deal which will pump natural gas from the Caspian Sea and the Middle East to Europe by early next year.

'I don't think that anybody can stop this project now,' Karamanlis told journalists.

The project also stands to include many of the top oil companies in the world, including US Chevron Texas, Russian-British TKK-BP, Russian Rosneft, Bulgargaz, Terminal Universer Bourgas from Bulgaria and Greece's Hellenic Petroleum, Promitheas Gas and Petrola.

Putin will fly on to Africa for official visit to South Africa and Morocco on September 6-7.