PM: Bulgaria Walks out of Burgas-Alexandroupolis Pipeline

Business » ENERGY | June 11, 2010, Friday // 14:05
Bulgaria: PM: Bulgaria Walks out of Burgas-Alexandroupolis Pipeline “We saw what happened at the Gulf of Mexico,” Bulgaria's Prime Minister Boyko Borisov said, referring to the huge and growing oil spill there. Photo by BGNES

Bulgaria's prime minister has surprisingly announced that the country will dump the Burgas-Alexandroupolis oil pipeline project over fears that it is unprofitable and damaging for the country.

“Bulgaria gives up the Burgas-Alexandroupolis oil pipeline project,” Boyko Borisov said on Friday after a meeting with the ambassadors from European Union countries.

Borisov singled out the resistance of the people in the Black Sea region of Burgas among the arguments in support of his decision.

“The pipeline passes through protected areas from the European environmental protected area network Natura 2000, to top it all off there are no guarantees for us to see returns in the short term,” Borisov said.

“We saw what happened at the Gulf of Mexico,” he added, referring to the huge and growing oil spill there.

Borisov's statement comes a day after Russia warned that it may indefinitely delay construction of the oil pipeline across Bulgaria and Greece if Sofia does not complete its revision of the plan in the next few months.

"There has to be a decision on the future of the project no later than this fall," Russia's Energy Minister Sergei Shmatko told reporters at the State Duma after a speech on the situation in the country's energy industry. "It's quite possible that we will have to — not terminate — but freeze the project."

Greece, which the European Union is saving from defaulting on its foreign debt, has also recently called for the plan to move ahead as soon as possible in anticipation of investment and future transit fees.

After it took office in July 2009, Bulgaria's new center-right government of the GERB party made it clear it was going to reconsider the country's participation in the three large-scale energy projects - South Stream gas pipeline, Burgas-Alexandroupolis oil pipeline, and Belene Nuclear Power Plant.

Construction of the line has been on ice even since after Bulgaria's government balked at the potential environmental damage that the pipeline could inflict on its resort-dotted coastline.

Three Bulgarian Black Sea municipalities - Burgas, Pomorie, and Sozopol - have voted against the pipe in local referendums over environmental concerns.

Municipalities neighboring Pomorie and nearby Burgas are also harboring fears that the pipeline could damage their lucrative tourism business, while environmental NGOs have branded the existing plans to build an oil terminal out at sea a disaster waiting to happen.

Bulgaria, Greece and Russia agreed to build the pipeline between Burgas and Alexandroupolis, taking Caspian oil to the Mediterranean skirting the congested Bosphorus, in 2007 after more than a decade of intermittent talks.

The agreement for the company which will construct the Burgas-Alexandroupolis oil transit pipeline was signed by Bulgaria during Russian President Putin's visit to Bulgaria in 2008.

The 280-kilometer pipeline, with 166 kilometers passing through Bulgaria, would have an initial annual capacity of 35 million tonnes, which could be later expanded to 50 million tonnes. Its costs are estimated at up to USD 900 M.

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Tags: Burgas-Alexandroupolis, Belene

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