Bulgaria has ruled out paying damages for terminating its participation in the Burgas-Alexandroupolis oil pipeline project, which dealt a killer blow to the Bosporus bypass link.

"I deeply respect Mr Shmatko and want to wish him Merry Christmas and Happy New Year. But Russia will not pocket not even one lev from us for Burgas-Alexandroupolis project," Prime Minister Boyko Borisov said on Tuesday during his visit to the town of Ruse.

The statement came a day after Russian Energy Minister Sergey Shmatko warned his country will take all legal measures available to make Bulgaria pay indemnities over the Burgas-Alexandroupolis oil pipeline project.

"We will make a full legal assessment of Bulgaria's actions," said Russian Minister of Energy Shmatko, as quoted by RIA Novosti.

"We will calculate the expenses made by companies in the project. Without all doubt, given procedures at hand, those costs will be claimed from the Bulgarian party," clarified Shmatko.

Earlier in December, the Bulgarian government said it will leave the project, which involved building a pipeline through Bulgaria and Greece to transport Russian oil from the Black Sea to the Aegean, bypassing the Bosphorus.

The Bulgarian government announced it is quitting Burgas-Alexandroupolis as not economically efficient, after months of sending negative signals as to its commitment to the project.

All the same, Monday Russian Energy Minister Shmatko reiterated his position that the project as negotiated was in the best interests of all parties involved - Bulgaria, Greece and Russia.

Bulgaria's Finance Minister Simeon Djankov has expressed confidence that the withdrawal will not force the country to pay anything more than its EUR 6 M outstanding dues on the project.

Just Sunday, Bulgarian Economy and Energy Minister Traicho Traikov said he felt Bulgaria's quitting of Burgas-Alexandroupolis has not harmed Bulgarian-Russian energy relations.