Cautious optimism over building a new oil pipeline

The plan for constructing an oil pipeline from the Black Sea port of Burgas to Alexandroupolis had almost disappeared from the pages of the Bulgarian press in the last three to four years. When it rarely appeared, in the back pages, it was only to report official Bulgarian views on the supposedly big or insurmountable problems and the obstacles of all kinds standing in the way of the project. One may wonder why, since not only for Bulgarian and foreign experts but also for any well-intentioned ordinary layman the advantages of the project were patently obvious, in comparison to other ideas and proposals for the overland transportation of oil from the rich deposits of the Caspian Sea to the West through the Balkans. For a start, the project measures between 260 and 300 kilometers in length (differences between Bulgarian and Greek experts had not been entirely ironed out until recently, due to the objections of the former on environmental grounds). The pipeline will follow the shortest route along the Black Sea coast, at a maximum altitude of 60 meters. Cost: $600-700 million. The contrast with the alternative proposal for a pipeline running from Burgas all the way west to the Albanian port of Vlore, persistently but ineffectively pursued by the American company AMBO (name derived from Albania-Macedonia-Bulgaria), is stark: That project would have a distance of 950-1,000 kilometers (around 600 miles), running through three Balkan countries, at least two of which are not enjoying the best possible relations – to put it diplomatically – following the armed clashes in the Former Yugoslav Republic of Macedonia (FYROM), which may or may not have ended. This pipeline would have to traverse two mountain ranges 1,500-2,000 meters high, necessitating numerous pumping stations. Even AMBO’s president, Ted Ferguson, put the cost of this project at $1.2 billion, which Bulgarian experts consulted by Kathimerini English Edition consider to be too conservative, given the physical and technical problems. The cost would, of course, be reflected on the prices paid by future clients. Regarding the Romanian-inspired plan for a pipeline from Constanta to Trieste on the Adriatic, Greek Development Minister Nikos Christodoulakis has said, On such issues, the best answers are usually given by the map, in commenting on the comparative advantages of the various plans, during a press conference with his Bulgarian counterpart, Konstantin Paskalev, after their meeting in Sofia on Tuesday. Quite true. Why then, has Sofia in public tended – indirectly but quite clearly – in the last four years to place emphasis on the Burgas-to-Vlore route as an indispensable part of the plans to upgrade the infrastructure of (so-called) European Axis 8 from Sofia through Skopje to Tirana? Until last June, the competent Bulgarian government officials would stress on every occasion that the Burgas-Alexandroupolis option would become economically viable only on condition that it secured 15 million tons of oil annually; as if there was a long line of eager oil suppliers for the Burgas-Vlore route, the transportation costs of which would be considerably higher for the above reasons. Another sticky point for the setting up of the company that would undertake construction of the Burgas-Alexandroupolis pipeline has been the inexplicable insistence of the Bulgarian side on obtaining the rather excessive stake of up to 25 percent, the rest going to Greece and Russia. The expansive talk which various Bulgarian officials used in their arguments for the Burgas-Vlore option did not manage to completely dispel the suspicion that it was a peculiar form of a smokescreen hiding specific expediencies of a geopolitical, not economic or technical, character. And whereas, on the bottom line, there is nothing strange in Sofia’s drive to develop special relations with Skopje given the proximity of the two Slavic peoples, the peculiar political allergy of those in charge until recently toward any grand plan of cooperation with Russian interests – despite the economic benefits for Bulgaria, whose energy sources almost exclusively originate in Russia – remains inexplicable to this day. Even in light of the country’s Euro-Atlantic orientation, which is and will be a strategic priority for Bulgaria in the foreseeable future. Given this, there is absolutely no reason not to have confidence in the views of Bulgarian analysts that the main obstacle to progress in the Burgas-Alexandroupolis pipeline has essentially been the pursuit by certain outside interests to avert, at any cost, anything reminiscent of an axis of Christian Orthodox countries in the Balkans. One may legitimately wonder whether and how far things will actually change with the new era promised before the election by the ruling party of former King Simeon. The impression that the new government prefers a pragmatic approach to economic (and other) issues and rejects the shortsighted options to which ideological and political prejudices inescapably lead, was confirmed by Christodoulakis’s contacts with Paskalev, Prime Minister Simeon Saxe-Coburg-Gotha and the deputy prime minister responsible for economic affairs, Nikolai Vasilev. Paskalev’s view that economic criteria and factors will ultimately determine which pipeline plan investors will opt for. Developments are in fact expected quite soon. The committee of experts from Russia, Bulgaria and Greece is meeting in Sofia early next month, and its decisions will play a significant role in the setting up of the company Inter-Balkan Pipeline before the year is out, according to Christodoulakis’s and Paskalev’s forecast. The Greek minister expressed particular satisfaction with progress in the direction of balancing out the interests of the two countries on the basis of the common view that the pipeline will not only serve their economic interests but will also drastically upgrade the geostrategic importance of the entire region. These indications may permit of some cautious optimism, but a major new and unknown factor is the repercussions of the terrorist attacks on the USA on September 11, which killed thousands. It would certainly be normal in an era of confusion and insecurity for investors to turn their attention to secure plans, with secure oil supplies passing through secure countries such as Russia, Bulgaria and Greece, as Christodoulakis said in reply to a question by Kathimerini English Edition.

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