The main reason for Bulgaria's decision to quit the Burgas-Alexandroupolis pipeline is that the initial plan for the financing of the project fell through, said Traicho Traikov, Minister of Economy, Energy and Tourism.

"First there was talk of a partnership involving shares of 1/3 for each of the parties with guaranteed oil supplies and project financing. Then it turned out that the project would be half-owned by Russia, while the other half would be for Bulgaria and Greece, in order to secure oil deliveries. Later on it appeared that even this could not guarantee the economic feasibility of the scheme and that it could not be built using project financing," Traikov explained in an interview for Friday's morning broadcast of private TV station Nova TV.

He made it clear that Burgas-Alexandroupolis was a transit, rather than an energy project for Bulgaria, and that it had to be considered from a risk-benefit perspective.

Traikov mentioned that Bulgaria had to invest over EUR 300 M in the oil pipeline against the backdrop of relatively uncertain revenues and heightened concerns for the tourism industry in the region of Burgas.

"In the end, we had to decide whether or not to invest the money, given that the project has no energy or strategic importance for our country," Traikov declared.

Bulgaria's Energy Minster said that there were other projects whose economic feasibility was questionable or which entailed environmental risks but specified that these schemes, which he refused to name, offered clear strategic benefits.

"In this case Russian oil has to go to the Mediterranean Sea. Russian oil is obviously interested in this, and the Mediterranean Sea obviously needs this. However, the profit for Bulgaria remains unclear. Just as when a boy wants to go to his girlfriend's room and leaves muddy tracks all along the corridor. There obviously is a strategic benefit both for the boy and for the girl, but not for the corridor," Traikov stated.

He refused to comment on the option of the pipeline being implemented without Bulgaria's participation "because this would be an entirely new project."

Asked whether Bulgaria was seeking a freeze or on a permanent cancellation of the project, he said that the country would officially present its government-backed stance at an upcoming meeting of the three shareholders in Amsterdam and the response of the other participants would become clear at that point.

session of the three shareholders in Amsterdam was upcoming where Bulgaria would present its stance officially adopted by the government remaining shareholders would be made clear

Traikov rejected claims that shale gas exploration was already underway in Bulgaria for which the state had allegedly received BGN 30 M.

His statement, however, made it clear that a shale gas exploration contract may be signed very soon with US energy giant Chevron.

Once the contract got finalized, Chevron would pay BGN 30 M, and if the environmental impact assessment came out positive, the company would be allowed to drill for shale gas, if not- it would receive the money back, Traikov explained

Chevron's plans to conduct shale gas exploration in Northeastern Bulgaria and the government's approval for the activity have triggered an outcry from environmental and civil rights activists.

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