Bulgaria pulls out of Russia-Greece oil pipeline

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Bulgaria said on Wednesday it was pulling out of a long-stalled pipeline project meant to bring Russian oil to Greece through its territory, but Athens said it remained committed.

"Bulgaria suggests cancelling the project by mutual agreement. Otherwise, it will back out unilaterally in 12 months," Finance Minister Simeon Djankov said.

The government said the project, originally estimated in 2007 to cost $900 million (710 million euros at the time), was no longer seen as being economically viable.

Despite pressure from its partners, Bulgaria has also repeatedly expressed reservations about the environmental impact of the 280-kilometre (175-mile) pipeline because it would pass through nature reserves.

It would have allowed Russia to transport oil to Europe while bypassing the busy Bosphorus strait, running overland from the Bulgarian Black Sea port of Burgas to Alexandroupolis on the Aegean Sea in Greece.

Djankov said Sofia would pay the 12 million leva (6.1 million euros, $8.2 million) it owes to the company founded to construct the pipeline, 51-percent owned by Russia and 24.5 percent each by Bulgaria and Greece.

Crisis-hit Greece said however Wednesday it was sticking with the project.

"We do not have any official information (...) on a Bulgarian withdrawal," Deputy Energy Minister Yannis Maniatis said.

"Greece remains attached to its strategic choice, in view of the usefulness of the pipeline for both Greece and Bulgaria as well as for supporting Europe's energy security."

He said that Greece was working to address the environmental issues around the project.

Bulgaria last week granted the status of national importance to work on its stretch of the 3,600-kilometre (2,200-mile) South Stream gas pipeline to carry Russian gas to Europe.

Sofia also plans to build a 100-kilometre (60-mile) pipeline to link up its gas network to the Greek one that will enable it to receive gas from the Caspian region via the ITGI pipeline project linking Turkey to Greece and Italy.

© 2011 AFP

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