ECONOMY

Bulgaria backs draft Burgas-Alexandroupolis oil pipeline contract

SOFIA (Reuters) – The Bulgarian government approved yesterday a draft contract for a -700-million trans-Balkan oil pipeline with Greece and Russia, aimed at bypassing the busy Bosporus strait tanker route. Sofia, Moscow and Athens are expected to sign the deal in early March in Athens, probably on March 6. The project has been delayed for more than a decade over disagreements about ownership, construction, transit fees and efficiency. Senior officials from the three countries last week endorsed the plan for the construction of a 280-kilometer pipeline that will send Urals crude from Bulgaria’s Black Sea port of Burgas to Greece’s Alexandroupolis in the Aegean Sea. Construction is expected to start in early 2008 and the first supplies of oil will flow through the pipeline, which has a planned capacity of 700,000 barrels per day, in early 2011. Bulgarian officials said the country will receive between -27 million and -38.5 million a year in transit fees. Under the draft agreement, the countries will set up an international project company, in which Russian state oil firm Rosneft, pipeline monopoly Transneft, and Gazprom Neft, the oil arm of gas monopoly Gazprom, will have 51 percent. Bulgaria and Greece will share the remaining 49 percent. Sofia plans to hand its 24.5 percent stake to state Bulgargaz and Transexportstroy, but said it may sell part or the entire stake to oil majors like KazMunaiGas or Chevron. Greece will participate with Hellenic Petroleum, the Latsis group and the Greek unit of Gazprom, Petroleum Gas.