Companies agree on joint venture to build pipeline between Caspian, Aegean

SOFIA - Companies from Bulgaria, Greece and Russia have agreed to form a joint venture to build a pipeline that will take Russian oil from the Caspian to the Aegean Sea, Bulgaria's regional development ministry said Friday.
"The companies interested in the project signed a memorandum to discuss within the next six months their stakes in a joint-venture International Project Company to build the pipeline," the ministry's Kalin Rogachev told a press conference.
"During that time other partners are also more than welcome to join," Rogachev added.
Four Russian companies -- TNK-British Petroleum, Stroytransgas, Sovcomflot and Tatneft -- will join the project.
Three others - Sibneft, Surgutneftegas, and Rosneft - are still discussing their financial engagement in the deal, Russian Deputy Minister of Fuel and Energy Anatoli Yanovski said on Friday.
The three Greek candidates for participation, Hellenic Petrol, Latsis Group, and Prometeus Gas have already formed a consortium called DEP-Traki, Greek Deputy Minister of Development Georgius Salagudis said.
Two more consortiums -- Universal Terminal Burgas and Transbalkan Pipeline Company -- will join the deal on the Bulgarian side.
Bulgaria, Greece and Russia in April signed the political accord for the 700 million euro (910 million dollar) deal to build a 285-kilometre (180-mile) pipeline linking the Bulgarian Black Sea port of Burgas, and Alexandroupolis in the far northeast of Greece.
It will allow Russian oil from the Caspian Sea to be transported from the port of Novorossiysk on the Black Sea by tanker to Burgas and to reach Alexandroupolis through the overland pipeline.
"If everything goes according to plan I think we will have the Burgas-Alexandroupolis pipeline in operation by the end of 2008," Salagudis said on Friday.
The decade-old Burgas-Alexandroupolis project is in competition with another pipeline project joining Bulgaria's Black Sea port via Macedonia with Albania's Adriatic coast, which is backed by the US consortium AMBO.
That 912-kilometre (570-mile) pipeline would cost 1.2 billion dollars and have a capacity of 35 million tonnes of oil per year. AMBO has said it could build it in four years.
Bulgaria is equally interested in participating in the construction of both pipelines, Regional Development Minister Valentin Tserovski said when he signed the Burgas-Alexandroupolis deal in April.
"There is enough oil for the two pipelines and they will both be profitable because of the constantly growing environmental demands in the straits of Turkey," Tserovski said.

05/27/2005 16:21 GMT