The Bulgarian Government supports officially the two projects for oil pipelines via Bulgarian territory, Bourgas-Alexandroupolis and Bourgas-Vlore.

This was announced on June 29 by Regional Development and Public Works Minister Assen Gagaouzov in Athens where he attended the Greece, Bulgaria and Romania: Business and Investment Summit “Strengthening Relations at the Threshold of EU Accession” organised by The Economist magazine. Gagaouzov said that irrespective of which project will be the first to get implemented, logics and market development will make possible the implementation of the second project after some time, so that the Bulgarian government issued letters in support of both of the projects.

The Bulgarian cabinet has decided to assist for the construction of a single universal entry point and single technical infrastructure on the territory of the Bourgas Bay to satisfy the needs of both of the pipelines, Gagaouzov said. The opinion of all stakeholders and companies at the moment is that, economically speaking, the Bourgas-Alexandroupolis oil pipeline project is the best option of the Bosporus and that the construction of the facility should start forthwith so that the pipeline goes into operation by 2010, Gagaouzov said. The Bulgarian Cabinet undertakes practical measures to speed up the oil pipelines projects, observing three key principles: economic feasibility and expediency, reliability in the transiting of oil in the medium and long term, and balancing the interests of all stakeholders, Gagaouzov said.

Meanwhile, Bulgaria may be left empty handed after the creation of the international corporation that will implement the Bourgas-Alexandroupolis oil pipeline project, unless it agrees that the Russian side is granted a 51 per cent stake in the venture, Bulgarian-language newspaper Dnevnik wrote on June 27, quoting an unnamed source close to the negotiations on the project with the Russian side. Russia presented at a meeting in Moscow three weeks ago its vision for the shares of the corporation that will design and operate the pipeline.

A month ago, Bulgaria said that Bulgargaz, the state-controlled gas monopoly, and the Universal Terminal Bourgas (UTB) company will co-create a Bulgarian corporation that will control at least 24.5 per cent of the Bourgas-Alexandroupolis oil pipeline contractor (half of the remaining 49 per cent), a move that squares with the position of the Russian side. It is unclear if Greece, the third partner in the pipeline project, will accept the new condition. The three partners had previously agreed to split the project into equal 33 per cent stakes. The Greek candidates have created the Thraki company for the purposes of the project.

Participants in the Moscow meeting said they were rather left with the impression that TNK-BP, one of the Russian companies involved in the project, had presented its own vision for the project and that it was not supported by its fellow Russian partners Gazprom Neft and Rosneft.

According to unofficial sources, if the Bulgarian representatives consent to the Russian demands for a bigger share of the pipeline that could be interpreted as a compromise in the context of the two sides’ ongoing dispute over a long-term gas supply agreement. If Moscow has made any demands for a bigger share of the pipeline project, these were tabled at expert level with no moves made in that direction on political level, said the Bulgarian Economy and Energy Ministry. Bulgargaz and UTB will have to raise 230-240 million euro for the project. That amount should not be a problem, the Bulgargaz management says. The cost of the 280-km Bourgas-Alexandroupolis pipeline is estimated at 700 million euro. The facility will initially transit 35 million tons of oil annually.
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The prime ministers of Bulgaria, Albania and Macedonia signed the memorandum for the construction of the Bourgas-Vlore pipeline in December 2004. The facility, eyed by BP, ExxonMobil and Texaco, should be completed by mid-2008 and should utilise no government financing. The pipe will have an annual capacity of 35 mln tons. Together with Ex-Im Bank, OPIC have expressed readiness to help the financing of the AMBO project for the Bourgas-Vlore oil pipeline.