Bulgaria 'Present' at Russian Pipeline Meeting Unbeknownst to Govt

Vladislav Emelyanov, CEO of the TBB company, was in Sofia for 2-day talks. Photo by Dnevnik

Bulgaria appeared to have been represented at a Wednesday's meeting in Moscow on the fate of the Burgas-Alexandroupolis oil pipeline in spite of earlier denial by the Finance Ministry.

A representative of the international project company Trans-Balkan Pipeline told the Bulgarian press earlier on Wednesday that the economic plan for the construction of the Burgas-Alexandroupolis oil pipeline would be presented in Moscow on Wednesday.

Asked for comment, representatives of the Finance Ministry, which is in charge of the project on part of the Bulgarian government, said they know nothing about the negotiations in Moscow and will duly inform the media if "something happens".

Only in the late afternoon did the Finance Ministry send out a press statement explaining that such a meeting had in fact taken place in Moscow on Wednesday. The statement, however, made no mention of the confusion with the initial repudiation of the news.

The meeting on the Burgas-Alexanroupolis oil pipeline in Moscow on Wednesday included representatives of Russia and Bulgaria, the Finance Ministry press office announced citing one of the Bulgarian members of the Supervisory Board of Trans-Balkan Pipeline, Rumen Porodzhanov.

It considered a funding proposal made by one of the Russian partners in the project, Transneft. According to Porodzhanov, the participants in the meeting agreed to have the TBB company elaborate the proposal further in order to demonstrate clearly the economic benefits for the shareholders from the potential construction and operation of the Burgas-Alexandroupolis project.

Porodzhanov made no mention of the presence of the Greek representatives at the Moscow meeting. This is not surprising given that in July 2010, the TBB CEO Vladislav Emelyanov said a new Bulgarian-Russian meeting dedicated to the future of the stalled pipeline will take place in late September or early October, most likely in Moscow.

Bulgaria, Greece, and Russia signed the agreements for the so called "Eastern Orthodox pipeline", which is supposed to bring Russian and Caspian oil to the Mediterranean by circumventing the Turkish straits, back in 2007.

The Trans-Balkan Pipeline company, which is in charge of the construction and subsequent operation of the future pipeline, and is headquartered in the Netherlands, was set up in 2008.

The Russian participant in the project, Pipeline Consortium Burgas-Alexandroupolis Ltd, has a share of 51%. It was founded jointly by three companies: AK Transneft (33.34%), NK Rosneft (33.33%), and Gazrpom Neft (33.33%).

The Bulgarian Joint stock company "Project Company Oil Pipeline Burgas-Alexandroupolis – BG" AD has a share of 24.5%. It was initially founded as jointly by two state companies, Bulgargaz (50%) and Technoexportstroy (50%) but was transferred in full to the Finance Ministry in February 2010.

The Greek participants are Helpe Thraki AE with 23.5% and the Greek government with 1%. The Helpe-Thraki AE was founded jointly by "Hellenic Petroleum" (25%) and "Thraki" (75%).

On July 16, 2010, the Bulgarian government completed the restructuring of its Project Company Oil Pipeline Burgas-Alexandroupolis – BG" AD, which sealed the transfer of the company under the responsibility of the Finance Minister.

Construction of the pipeline has been on ice even after Bulgaria's government balked at the potential environmental damage that the pipeline could inflict on its resort-dotted coastline. The cabinet has stated that its final decision on the country's participation in the project will depend on its upcoming international environmental assessment.

Two months ago Bulgaria's Prime Minister Boyko Borisov unexpectedly said that his country was "giving up" on Burgas-Alexandroupolis oil pipeline project.

In a dramatic twist that left all of Europe confused, Borisov retracted his statements shortly afterwards, saying that the Bulgarian government hasn't made a final decision regarding the construction of the pipeline.

After it took office in July 2009, Bulgaria's new center-right government of the GERB party made it clear it was going to reconsider the country's participation in the three large-scale energy projects - South Stream gas pipeline, Burgas-Alexandroupolis oil pipeline, and Belene Nuclear Power Plant.

Three Bulgarian Black Sea municipalities - Burgas, Pomorie, and Sozopol - have voted against the pipe in local referendums over environmental concerns.

Municipalities neighboring Pomorie and nearby Burgas are also harboring fears that the pipeline could damage their lucrative tourism business, while environmental NGOs have branded the existing plans to build an oil terminal out at sea a disaster waiting to happen.

Bulgaria, Greece and Russia agreed to build the pipeline between Burgas and Alexandroupolis, taking Caspian oil to the Mediterranean skirting the congested Bosphorus, in 2007 after more than a decade of intermittent talks.

The agreement for the company which will construct the Burgas-Alexandroupolis oil transit pipeline was signed by Bulgaria during Russian President Putin's visit to Bulgaria in 2008.

The 280-kilometer pipeline, with 166 kilometers passing through Bulgaria, would have an initial annual capacity of 35 million tonnes, which could be later expanded to 50 million tonnes. Its costs are estimated at up to USD 1.5 B, up from initial estimates at USD 900 M.

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