Bulgaria PM Confirms Pull Out of Oil Pipeline Project

Business » ENERGY | November 16, 2010, Tuesday // 12:55
Bulgaria: Bulgaria PM Confirms Pull Out of Oil Pipeline Project "Yes," Prime Minister Boyko Borisov said in an interview for 24 Hours, when asked if project will be abandoned. Photo by BGNES

Bulgaria's prime minister has reiterated his determination to abandon the Burgas-Alexandroupolis oil pipeline project over fears that it is unprofitable and environmentally unfriendly.

"Yes," Prime Minister Boyko Borisov said in an interview for 24 Hours, when asked if project will be abandoned.

“Yesterday Putin himself said – we understand the concerns of our colleague as far as environment protection is concerned. We have other projects and we will work on them,” Borisov added.

Little mention was made publicly by Prime Minister Boyko Borisov and his Russian counterpart Vladimir Putin on Saturday of the Burgas-Alexandroupolis oil pipeline, the major bilateral energy project – which has been viewed by Sofia as very problematic over the past year.

Borisov has written off the project many times on environmental grounds, and shortly before the Russian PM arrived to Sofia, the Bulgarian Environment Ministry declared the oil pipeline's environmental impact assessment unsatisfactory – even though it still left the door open for the joint Bulgarian-Greek-Russian company, Trans-Balkan Pipeline - to repair it.

"After the environment assessment is ready, it will be decided whether this project will be carried out or not," a government spokeswoman said on Monday.

Bulgaria has said it will steer clear of pulling out of the project before the environment ministry comes up with a final decision on the pipeline to avoid paying compensation to Greece and Russia.

Russian commentators have recently suggested that Bulgaria eventually will come around for Burgas-Alexandroupolis – but that his will happen at a certain price for Russia – and perhaps Greece.

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

The cabinet has stated that its final decision on the country's participation in the project will depend on its upcoming international environmental assessment.

In the summer this year Bulgaria's Prime Minister Boyko Borisov unexpectedly said that his country was "giving up" on Burgas-Alexandroupolis oil pipeline project.

In a dramatic twist that left all of Europe confused, Borisov retracted his statements shortly afterwards, saying that the Bulgarian government hasn't made a final decision regarding the construction of the pipeline.

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.

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: Vladimir Putin, Russia, Boyko Borisov, Gazprom, South stream, gas transit pipeline, Belene Nuclear Power Plant, Belene NPP, Burgas-Alexandroupolis oil pipeline

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