NEWS

Putin, Parvanov arrive to revive pipeline project

Russian President Vladimir Putin arrives in Athens today intent on reviving the long-stalled Burgas-Alexandroupolis oil pipeline project. The presence of Bulgaria’s president, Georgi Parvanov, who will join Putin and Greek Prime Minister Costas Karamanlis in tripartite talks, is a further indication of Putin’s resolve to revive the project and, at the same time, become less dependent on Turkey for the transport of Russian oil from the southern parts of the country. The project was first mooted in 1991, by an aide to the late Greek tycoon Yiannis Latsis. The idea was to transport Russian oil by tankers from the port of Novorosiisk to Burgas and then use the 280-kilometer pipeline to bypass the Bosporus strait in Turkey. Tankers would then transport the crude oil from the northern Greek port of Alexandroupolis to destinations in the Mediterranean and Western Europe. Economically, the project is not a large-scale one: When completed, the pipeline will have a carrying capacity of 35 million tons per year. While this is supposed to shave off $8 per barrel in transport costs, it will only account for a small portion of Russian oil exports: In 2005, 150 million tons of Russian oil were transported by tankers crossing the Bosporus. Several companies have expressed an interest in building and operating the pipeline, including the US’s ChevronTexaco, which has asked that no state-controlled Greek or Bulgarian firms be involved in the project. The others are Russian-British joint venture TNK-BP, Rosneft and Sibneft of Russia, Bulgargaz and Universal Terminal Burgas from Bulgaria, and Greece’s state-controlled Hellenic Petroleum and private company Promitheas Gas, which already operates the pipeline bringing Russian natural gas into Greece. Despite the relative small scale of the project, it is seen by experts as part of Putin’s strategy to increase Russia’s control over the transport of oil and gas. It is also said that earlier US misgivings about the project have abated now that the Baku-Ceyhan pipeline transporting oil from Azerbaijan to southern Turkey via Georgia is fully operational. According to sources, however, the US would not like to see Greece becoming too dependent on Russia for its energy needs. Putin’s and Parvanov’s visit will result in traffic disruptions in Athens city center between 11.30 a.m. and 10 p.m. Putin is expected to arrive between 1 and 2 p.m., half an hour after the Bulgarian president.