What is indeed new is that, in this new world reality, Greece set forth to reach the ambitious goal of playing a part. The country finds itself in a position of having actual cards to play in this new energy game. Although its geostrategic importance is undisputable, it should be stated that success comes from 95 percent work and 5 percent talent. Nature gave the country the 5 percent and the rest must be earned. Much work needs to be done. Greeks must play their cards right to succeed. And there is a lot at stake. Being at the crossroads between Europe, Africa and Asia, a member of the EU and NATO and on excellent terms with the US and Russia gives the country a presence but also, one hopes, a strong voice. The aim is to provide its allies with safe energy routes: to safeguard its own energy flow; to use the earnings to invest in infrastructure; to pursue economic growth for the whole region; to enrich its national energy balance with clean energy; and to join the European Union, the Balkans and the Western world as a whole in a common effort to meet the increasing demands of the future. The project of the oil pipeline between the Bulgarian industrial port of Burgas and the northern Greek city of Alexandroupolis opens the door.

The Burgas-Alexandroupolis oil pipeline

Currently, some 45 million tons of oil flows through the Bosporus strait every year. The quantity is expected to increase greatly within the next five years. There is some speculation that up to 2 million barrels will be transferred through the Bosporus daily. It is surmised that the strait cannot cope with such an increase in oil flow. Different scenarios were drawn up to discover alternative routes. One alternative was the Burgas-Alexandroupolis pipeline. A second route would transfer oil from Baku in Azerbaijan to Ceyhan in Turkey, a third from Burgas to Vlore in Albania and a fourth from Constanta in Romania to Trieste in Italy. The first alternative was deemed to be the safest and cheapest solution to the problem.

The history

In 1993, Nikos Grigoriadis, an executive of a large private company who is responsible for energy investments in the group, tabled the idea of creating the Burgas-Alexandroupolis oil pipeline. The Greek prime minister at the time, Constantine Mitsotakis, held talks regarding the matter in the wider context of energy. In June 1994, after a change in Greek government, the idea was kept alive when the Greek and Bulgarian ministers Karolos Papoulias (current president of the Hellenic Republic) and Hristo Totev signed a bilateral agreement to build the pipeline. In December, Greek Prime Minister Andreas Papandreou and Russian Deputy Premier Oleg Davidov signed a memorandum of cooperation. Six months later, in June 1995, experts from Russia, Bulgaria and Greece met to decide upon the details of the project. In January 1997, Greek Prime Minister Costas Simitis, Russian Energy Minister Petr Rodionov and Greek Minister of Development Vasso Papandreou met in Athens and announced that Russia and Greece would sign an energy cooperation protocol which would provide for the formation of a working group that would discuss issues related to the Burgas-Alexandroupolis pipeline. In October, another trilateral meeting of experts took place. In February 1998, the Greek consortium (DEP-Thraki) was established. In May 1998, a memorandum was signed to establish the Transbalkan Oil Pipeline company. There was keen interest from a wide array of companies from different countries to participate apart, of course, from companies coming from the main three states, namely Russia, Bulgaria and Greece. In September 2000, the working group was established and an action plan and operation regulations were drawn up. In January 2002, the final conclusions of the studies that were carried out were evaluated and approved.

In 2004, the new government in Greece decided to push things forward using political leverage. In August, the Greek ministers of foreign affairs, Petros Moliviatis, and development, Dimitris Sioufas, met with Bulgarian Minister of Regional Development and Public Works Valentine Tserovski. In October, the same two Greek ministers and the deputy minister of foreign affairs, Evripidis Stilianidis, had a private meeting with Igor Yusufov, who was commissioned by Russian President Vladimir Putin to discuss matters of international energy cooperation. As a result, a few days later, on November 5, 2004, representatives from the three countries met in Athens and agreed on a draft memorandum of understanding between the governments of the Russian Federation, Bulgaria and Greece.

During the talks, the three sides agreed that although the project had their full political backing, it could only proceed on the basis of private initiative and market principles. In January 2005, the tripartite working group met and a new group was formed: the initiative group of companies. And thus the private sector re-entered the game in full force. In March, both the working and the initiative groups had a joint meeting in Moscow. On April 12, 2005, after 13 years of talks, the political memorandum for the construction of the Burgas-Alexandroupolis oil pipeline was finally signed in Sofia by Russian Minister of Industry and Energy Victor Khristenko, Bulgarian Minister of Regional Development and Public Works Tserovski and Greek Minister of Development Sioufas. The three countries that signed the memorandum stated that the construction task would be assigned to private companies following a tender. In February 2006, the Greek minister of development met with Bulgarian Minister of Economy and Energy Roumen Ovcharov. Later, in March and July, the Greek minister met with the general director of the Russian Ministry of Industry and Energy, Anatoli Yanovski.

The final step

In September 2006, Russian President Putin, Greek Prime Minister Costas Karamanlis and Bulgarian President Georgi Parvanov met in Athens in what could prove to be an historic moment. The three leaders pushed the door wide open and committed to sign an agreement within 2006 for the construction of the Burgas-Alexandroupolis pipeline. If everything goes well, by 2008, 35 million tons of Russian oil will travel annually from the port of Novorossiysk in the Black Sea to Burgas and then via the new pipeline to Alexandroupolis. From there, it will reach oil consumer countries in the West. The pipeline capacity can be expanded to carry 50 million tons in total every year. It will be 280 kilometers long and will cost from 800 million euros (35-million-ton capacity) to 900 million euros (50-million-ton capacity). Two storage areas will also be built to stock up to 650,000 cubic meters of oil in Burgas and up to 450,000 cubic meters of oil in Alexandroupolis.

Despite the numerous difficulties, conflicting interests and international concerns, the economic and energy benefits for the three countries, the wider region of Southeast Europe, the European Union and for the whole Western hemisphere are enormous. The project will further reinforce the leading position of Russia and put Bulgaria and Greece on the world energy map. Above all, it is a win-win situation for all concerned: partakers, neighbors and allies. The Burgas-Alexandroupolis oil pipeline is a short and safe alternative route that brings growth to the wider region and cheap energy to all. Not such a bad idea.

By Peggy Papakosta
Peggy Papakosta is a political scientist and special adviser to the Greek minister of development.