ECONOMY

Sofia: Pipeline dispute with Athens almost over

SOFIA (Reuters) – Bulgaria said yesterday it was close to solving a long-standing dispute with Greece over stakes in a planned 700-million-euro ($607 million) project to build a trans-Balkan pipeline to carry Russian oil. The project has been in deadlock for nearly seven years, mainly because Bulgaria and Greece have so far failed to agree over their stakes in a consortium with Russia that would be set up to manage the 256km (160 miles) underground pipeline. «Bulgaria insists on equivalent participation, which means some 33-percent stake for everyone. We have recently received Russia’s backing for that and by end-February we will have Greece’s consent,» Bulgaria’s Deputy Construction Minister Hasan Hasan told a news conference. «The main problem, so far, is that Greece has been insisting on a smaller stake for Bulgaria, which was initially offered a token 5-10 percent. Our previous government tried to raise it to 20 percent, while we are now determined to have 33.» Bulgaria’s government of Prime Minister Simeon Saxe-Coburg-Gotha, who took office in July last year, said making Bulgaria an energy distribution center in the region was among its priorities. Hasan said Greece’s previous arguments that Bulgaria lacked money to back a bigger stake in the project were now groundless. Seven Bulgarian companies, including the country’s biggest oil refinery LUKOIL Neftochim Bourgas, majority owned by Russia’s major LUKOIL, and local gas supplier Overgas linked to Russia’s giant Gazprom were ready to take part in the project and provide funding, said Hasan. The project envisages carrying 35 million tons of crude per year from the Russian port of Novorosiisk by tanker to the Bulgarian Black Sea port of Bourgas, from where the underground pipeline will transfer the oil to Alexandroupolis in northeastern Greece. «For the first time in many years, we are so close to solving all problems and to signing a trilateral government memorandum on March 6 on the start of the project,» said Hasan. Construction was expected to begin in 2003 and end in 2005, he added. The three countries planned to present the project to oil producers in Moscow and Almaty in April, and to financial companies in London later. Hasan said that Bulgaria had also reached agreement with Greece over the transition taxes, which the two countries will collect – $1 per ton of transit oil a year.