(MosNews) - Following a meeting between Russian President Vladimir Putin and his Greek and Bulgarian counterparts, the three countries announced that they have agreed to begin construction of a long-delayed oil pipeline that will link the Black Sea to the Aegean. An official agreement on the issue will be signed by the end of the year, reports Trend.
The new pipeline will cut the heavy oil tanker traffic in the congested Bosphorus Straits. It is estimated that current delays caused by so many ships trying to load oil in the Bosphorus cost energy companies at least 500 million euros a year.
Announcing the pipeline deal, Putin said, quoted by EuroNews: Russia is one of the principal suppliers of the energy resources for the European and world markets, and Greece and Bulgaria for a long time have been our reliable partners in this field, so this partnership represents for Russia a particular interest.
He added: Russia isnt imposing any strict conditions for this project. We want just this kind of venture to proceed with our traditional partners.
More than half of the 280 kilometer pipeline would pass through Bulgaria. It is projected to cost 700 million euros ($1 billion) and would have a final annual capacity of 35 million tons of oil. The pipeline will make Greece a transit hub for Russian
energy exports to the West and strengthen Moscows grip on the market. It will run from the Bulgarian Black Sea port of Burgas to Greeces Alexandroupolis on the Aegean.
The three countries agreed that construction will start early next year and the provisional completion date was set for 2009.
Sergei Bogdanchikov, the head of Russias state-controlled oil company, Rosneft, told RIA Novosti that Russian companies might hold a controlling stake in the pipeline project. Russian companies, as companies that supply the pipeline with oil, may have a controlling stake, he said.
Bogdanchikov said the members of the pipeline building consortium were yet to be finalized, though he added that Rosneft, Gazpromneft, a subsidiary of Russian energy giant Gazprom, Russian-British oil venture TNK-BP, which coordinates the project for the Russian side, and other companies, were interested in the project.