New Balkan oil pipeline to operate by 2011, FYROM minister says

VOULIAGMENI, Greece (AP) – A planned trans-Balkan pipeline will begin transporting oil from the Black Sea to the Adriatic by 2011, a senior official of the Former Yugoslav Republic of Macedonia (FYROM) said on Thursday. Gligor Tashkovich, FYROM’s minister for foreign investment, said in an interview that the pipeline offered advantages over its main regional competitor, the Burgas-Alexandroupolis pipeline that will carry Russian oil through Bulgaria to Greece. «I expect the physical groundbreaking to begin in either June or September of next year,» he said, «with completion expected by 2011.» Tashkovich said the $1.5 billion (-1.2 billion) pipeline, known as the AMBO project, will link Burgas in Bulgaria to Vlore in Albania and would not have to rely on government funding. He claimed it could offer per-kilometer transit rates of about $9.10 (-6.69) a ton. Per-kilometer transit rates for the Burgas-Alexandroupolis pipeline – scheduled to start operating in 2010 – will be $5.42 (-3.99) a ton, according to Greece’s Hellenic Petroleum, part of the consortium involved in the project. Both pipelines will bypass the busy Bosporus Strait in Turkey. Tashkovich said the terminus at Vlore, Albania, would offer better deep-water port facilities than Alexandroupolis in northern Greece. «Go study the figures,» he said. «I think you will find that Alexandroupolis will not be able to support as big tankers as they claim.» However, the 895-kilometer (556-mile) AMBO pipeline will be three times as long as Burgas-Alexandroupolis, will cross hillier terrain and will transit three countries rather than two. Ministers from Bulgaria, FYROM and Albania signed an agreement on January 31 setting out the legal framework for the AMBO project. Tashkovich said the pipeline is designed for long-haul oil transit, and would be better positioned to serve Western European and North American markets than Alexandroupolis, much farther to the east, and Trieste to the north – which may connect with Constanta on Romania’s Black Sea coast. The minister also claimed that the project had received commitments from a major oil company to use up to a quarter of the pipeline’s capacity, though he would not name the company. The project will be financed by 71 percent debt and 29 percent equity. It is being organized by the Albanian Macedonian Bulgarian Oil Corp, after a feasibility study financed by the US government in 2000. Once financing has been secured and impact assessments completed, construction could begin in June or September of 2008 and would take 24-39 months to complete, Tashkovich said. It is still unclear where the oil for the AMBO pipeline will come from. Tashkovich said there is enough oil supply coming online from new producers in the Caucasus – which includes countries such as Kazakhstan as well as Russia – to sustain both Balkan pipeline projects and others such as Constanta-Trieste and pipelines in Turkey. «There’s tons of oil for all pipelines,» he said.

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