Russia, Greece and Bulgaria agreed to end years of disputes on Monday and launch a long delayed trans-Balkan oil pipeline linking the Black Sea to the Aegean. Russian President Vladimir Putin and Greek Prime Minister Costas Karamanlis told reporters the 700 million euro ($897.1-million) project would be signed by the three countries before the end of 2006.
The deal ends 14 years of disagreements that have held back the project, widely seen as pumping cheaper Russian crude to the Mediterranean region and strengthening Moscow's grip on the area's energy market. "Greece, Russia and Bulgaria agreed to sign a deal to back its construction within 2006," Karamanlis said after a meeting with Putin and Bulgarian President Georgi Parvanov in Athens. Putin said the pipeline, designed to bypass Turkey's busy Bosphorus Straits, would provide a safe and efficient supply of energy resources.
Tanker delays due to heavy traffic in the Straits are costing oil companies nearly $1.0 billion a year. "The result of this project will improve and enrich our ties," Putin said through a translator. "This can be a driving force for our countries in the immediate and long term future." For years, the three countries have disagreed on key issues, such as who would be responsible for building the pipeline, the ownership of the terminals and transit fees.
Around 155 km (95 miles) of the 285 km (180 miles) Bourgas-Alexandroupolis pipeline, which will eventually have a daily capacity of about 800,000 barrels, will pass through Bulgaria.
It will rival the new $4 billion Baku-Ceyhan pipeline from Azerbaijan to the Mediterranean that bypasses Russian soil and will pump 300,000-400,000 barrels per day of Azeri crude to world markets by the year-end, rising to a million bpd in 2008. The pipeline will initially carry 10 million tonnes of crude a year from the Black Sea port of Bourgas to the north Aegean town of Alexandroupolis, reducing environmental risks from oil spills. Its capacity is designed to eventually reach 35 million tonnes about three years after its expected launch in 2009.