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Russia Signs Burgas-Alexandroupolis Pipeline Deal

As expected, today in Athens Russia signed the Burgas-Alexandroupolis oil pipeline deal with the governments of Bulgaria and Greece, a $1.3 billion dollar project which will in theory break the bottleneck at the Bosporus Strait (as well as Turkey’s control over this export route) and significantly increase Russian control over European energy infrastructure.

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Another day, another deal

As reported in a Wall Street Journal article last year, the narrow and winding Bosporus Strait represents one of the world’s most critical “chokepoints” for the transit of energy supplies. Numerous projects have been in the works to overcome this bottleneck, and the Burgas project directly competes with the U.S. backed Baku-Ceyhan pipeline project, an initiative which is also fraught with problems. Andrew Kramer of the New York Times/IHT reports the following:

Still, in the strategic game of energy pipeline placements in Eurasia, where European countries and the United States are trying to both increase the export of oil and loosen Russia’s grip on the trade, a kind of slow-motion chess match spanning a decade already, Russian control of the Bosporus bypass pipeline is a mixed blessing for Europe. While raising supply, it also increases reliance on energy exported via Russian- controlled pipelines. Russia already supplies about a third of the oil and 40 percent of the natural gas used in Europe. For Russia, it provides another way around troublesome pipeline routes through former the Soviet states of Ukraine and Belarus. “There’s an element of a double- edged sword here,” Kupchan said.

Here is what Greek PM Konstantinos Karamanlis had to say about the deal:

It is a great pleasure and honour for both me and my country that you are visiting Greece for the second time in several months. And this meeting is certainly a further step that confirms the excellent state of Russian-Greek relations. This meeting is a milestone that marks the beginning of the implementation of a project with historical significance, the trans-Balkan Burgas – Alexandroupolis oil pipeline. And I am happy that in September 2006 when you were last in Greece, we showed proof of our resolve to see this project accomplished in a practical way and that we laid the groundwork for this positive result. I hope that both this project and other joint projects we are engaged in will always develop and progress successfully. Welcome, Mr President!