July 2 (Bloomberg) -- Bulgaria will take a final decision on building an oil pipeline that bypasses Turkey’s Bosporus strait after an environmental impact assessment is completed in February, Deputy Prime Minister Simeon Djankov said.
“The feasibility of this pipeline is questionable,” Djankov said in the Sofia-based parliament today, answering a lawmaker’s query. “The source of financing is still unclear and the oil supply for the pipeline has not been secured.”
Russia, Bulgaria and Greece agreed in 2007 to build the 285 kilometer (177 mile) oil pipeline from the Bulgarian Black Sea port of Burgas to the Greek port of Alexandroupolis on the Aegean Sea. The 1 billion-euro ($1.25 billion) pipe, with a capacity of 35 million metric tons of oil a year, would bypass Turkey’s crowded Bosporus and Dardanelles straits, saving the oil industry shipping costs.
Turkey is using the environment damage caused by BP Plc’s Gulf of Mexico spill to press its case that oil traffic through the straits is unsafe and potentially dangerous. The country yesterday said it has broad support from 20 oil companies for steps that would make use of the Bosporus straits for oil traffic more expensive than pipelines.
A referendum held in the Burgas region in 2008 opposed the pipeline on grounds there was a high risk of an oil spill from tankers filling the pipe, which could damage Bulgaria’s biggest Black Sea resorts.
The independent environmental impact assessment will be completed in October and given for final evaluation to Bulgaria’s Environment ministry, which, in turn will submit its conclusion to the Cabinet by February, when the government will take the final decision on the pipeline, Djankov said today.
The government of Prime Minister Boiko Borissov, which took office a year ago, is seeking ways to cut spending and bridge a budget deficit as the recession erodes revenue and investment. It froze several infrastructure projects and ordered an environmental impact assessment of the pipeline project.
Should Bulgaria decide to pull out of the project, it won’t have to pay compensation to Russia and Greece, Djankov said, as the projected pipeline route violates a European Union directive for conservation of wildlife, known as Natura 2000, because it passes through protected areas.
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