Russia to pull out of Bulgaria-Greece oil pipeline: report

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Russia is set to pull out of a long-delayed plan to build a joint oil pipeline with Bulgaria and Greece, the Vedomosti business daily reported Wednesday, citing sources close to the project.

Russian oil firms Rosneft and Gazprom Neft, and pipeline operator Transneft will announce that that they are ending financing for the project at a meeting in Rome on Thursday, Vedomosti reported, citing three sources.

The reason for the decision was Bulgaria's refusal to approve the pipeline route and a lack of guarantees from oil companies that they would use the pipeline, sources told the newspaper.

Russian President Dmitry Medvedev begins a two-day visit to Rome Wednesday, accompanied by Alexei Miller, the chief executive of gas giant Gazprom which owns Gazprom Neft.

The company founded to construct the pipeline is 51 percent owned by a consortium of the three Russian companies.

Representatives of the companies declined to comment to Vedomosti.

Russia had backed plans for the pipeline, which would allow it to transport oil to Europe bypassing the busy Bosphorus strait.

The 280-kilometre (174-mile) pipeline would run overland between the Bulgarian Black Sea port of Burgas and Alexandroupolis on the Aegean Sea in Greece.

Despite pressure from Athens and Moscow, Bulgaria has repeatedly expressed reservations about the environmental impact of the project because it would pass through nature reserves.

The project was launched in 2008 and the pipeline was first scheduled to open in 2011 but construction has been repeatedly delayed.

Bulgarian Prime Minister Boyko Borisov in November said in a newspaper interview that Sofia would abandon the deal because it was "dangerous for Bulgarian tourism."

Russia has since voiced doubts about its economic effectiveness.

Last year, Transneft's president, Nikolai Tokarev, said that the cost of transporting oil along the pipeline would be almost double that of transporting it via tanker, Vedomosti reported.

© 2011 AFP

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