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[February 02, 2007]

Burgas-Alexandroupolis pipeline important for European consumers of

(Interfax News Agency Via Thomson Dialog NewsEdge) Russian oil - Putin (Part 2)

MOSCOW. Feb 1 (Interfax) - The project to build the Burgas- Alexandroupolis oil pipeline from Bulgaria to Greece is important and one of the priority projects for consumers of Russian energy companies in Europe, Russian President Vladimir Putin said at a press conference on Thursday.

Work is finishing up to sign an agreement to build the oil pipeline, he said.

"We support this project. We believe that this is an important and a priority project for the consumers of our hydrocarbons in Europe," he said.

"If our Greek and Bulgarian partners cannot resolve the set of problems that exist in their side, we will have no choice but increase transit through territories of other countries," he said.

The European Union, whose members Georgia and Bulgaria are, "should be vitally interested in implementing this project," he said.

Bulgaria and Greece might lose the chance to act as countries transiting hydrocarbons from Russia and the Caspian area, Putin said. "In my view, this is so obvious that an agreement should be achieved as soon as possible," Putin said. "I've got the impression that the work is nearing its end not only in Greece but also in Bulgaria, and I hope that this will happen in the near future," he said.

The Russian, Greek, and Bulgarian leaders agreed in September 2006 to sign an intergovernmental agreement on the construction of the Burgas-Alexandroupolis oil pipeline by the end of 2006, but the parties failed to draw up the document by that time.

The aim of the Burgas-Alexandroupolis pipeline is to
bypass the
Black Sea and reduce the volume of oil being shipped
through theBosporus Straits and the Dardanelles. The 285-kilometer-long pipeline could initially carry 35 million tonnes of oil annually, but its handling capacity could be later increased to 50 million tonnes. The project is valued at some $900 million.

Russia will have a 51% stake in the project. Within the framework of the stake, Rosneft (RTS: ROSN), Gazprom Neft, a Gazprom (RTS: GAZP) branch, and Transneft (RTS: TRNF) have signed an agreement to set up the Burgas-Alexandroupolis Pipeline Consortium.

It is assumed that Greece and Bulgaria will cede their 49% stake to oil companies willing to provide guarantees of oil supplies through the pipeline. TNK-(RTS: TNKO)-BP, Chevron and KazMunayGaz are interested in the project. RTS$#&: GAZP, ROSN, TNKO, TRNF rm va

Copyright 2007 Interfax News Agency. Source: Financial Times Information Limited.

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