Greece, Bulgaria and Russia earlier this year agreed to spend over $1 billion to build a 230-kilometer oil pipeline from Bulgaria's Black Sea port of Burgas to Alexandroupolis on Greece's Mediterranean coast. VOA's Barry Wood reports from Alexandroupolis that when the pipeline is completed in 2011, fewer tankers will have to pass through the crowded Bosporus Straits next to Turkey's biggest city, Istanbul.
The Burgas-Alexandroupolis pipeline has been under discussion for over a decade. But the soaring demand for oil and the accompanying high prices have given the project a decisive push. If plans hold to schedule, construction begins in 2008 with oil flowing by 2011. In recent years significant oil reserves have been found in central Asia and shipment by tanker across the Black Sea is a principal means of bringing that oil to European and American markets.
The project will cost over $1 billion. The pipeline company will be 51 percent owned by Russian firms and the oil will come mainly from Russia.
But some analysts are worried that the pipeline will enable Russia to tighten its grip on the European energy market. Michalis Angelopoulos, the top government official in Eastern Greece, dismisses that concern. "I don't think we have to be afraid that Russia with 51 percent will dominate or determine our policy. We belong to the European Union. It's a European Union intervention for energy," he said.
Angelopoulos and the Athens government are big promoters of the pipeline. They say it will bring needed jobs and business to this depressed region, which is only a few kilometers from the Turkish border.
But the pipeline is dividing people in Alexandroupolis. Hotel owner Charalampos Samourkasidis says he does not like the idea of an oil terminal being nearby. "Alexandroupolis' economy is based on tourism, fishing and agriculture. And a possible ecological disaster would have a big impact on these three sectors," he said.
Pipeline supporters say they are taking precautions to ensure that there will be no environmental problems. They stress that oil tankers will be loaded at a terminal up to 10 kilometers off shore.
Nicholas Alexandris, the town's mayor and a supporter of the pipeline says "We think the pipeline will help and strengthen the town of Alexandroupolis. It will help us and bring Alexandroupolis to the top line [of economic importance]."
The pipeline could earn Greece $30 million a year in transit fees, and the government promises to keep that money here in eastern Thrace. There are predictions the city's population could double to 150,000 in 10 years.
But the Burgas-Alexandroupolis pipeline may have competition. There is a proposal for a 900 kilometer pipeline from Burgas, Bulgaria across mountainous parts of Macedonia to Albania. The disadvantage of this proposal is that it would be longer and more expensive than the Burgas-Alexandroupolis pipeline.
A third option is even longer, an 1,800-kilometer line from Constanza, Romania through Serbia, Croatia, and Slovenia to Italy. That project would use existing pipelines for about half the distance.
But Vassilis Choravas of the Alexandroupolis chamber of industry says the line through Greece is shorter and traverses flat land. "I think this pipeline is going to be the most competitive pipeline of the three solutions that are on the table now to bring Russian oil to western markets," he said.
The pipeline through Greece also has another big advantage: it already has a commitment from a Russian oil company to ship from Burgas to Alexandroupolis.