A race is underway in the Balkans to build an oil export pipeline that bypasses the Turkish Straits. One proposed line would go from Bulgaria to Albania, a second between Bulgaria and Greece, and a third, longer route from Romania to Italy. Barry Wood has more on the contest to be first to build an oil export pipeline across southeastern Europe.
The crowded Turkish straits cannot accommodate more oil tankers. With prices high and Kazakhstan oil exports growing, backers of the competing pipelines are scrambling for advantage.
Ted Ferguson heads the consortium to build the AMBO (Albania-Macedonia-Bulgaria-Oil) line 850 kilometers from Bulgaria west to Albania. He says, "We've got, I would say, six to 18 months to get things together and start construction."
New York investment banker Richard Ennis is promoting the rival Romanian route, the Pan European Oil Pipeline -- PEOP -- that would extend 1300 kilometers from Romania west through Serbia, Croatia, and Slovenia to Italy. It would cost more than AMBO but would carry twice as much oil.
Ennis concedes that only one of the rival pipelines may be built. "The pipeline that gets built first is going to win. And while some of the alternatives may be inferior to PEOP, if they get built first, they'll be the winner."
Gligor Toskovic, Macedonia's minister for foreign investment and a former AMBO official is confident that AMBO will win. All that's missing, he says, is the financial commitment of an oil company. "All the Bosporus proposals require an oil company. No one has one yet, despite what certain media might say. We'll be the first."
But a third route, the cheaper and shorter Bulgaria to Greece pipeline may be closest to securing financial backing. This 280 kilometer line is backed by Greece and Russia, which through Gazprom would own 51 percent of the pipeline.
Bulgaria's foreign minister, Ivailo Kalfin, says both the pipeline to Greece and the one to Albania are needed. "I think both pipelines are absolutely realizable. They're very important for Bulgaria. Bulgaria is working very hard for them."
Former oil company executive Frank Verrastro says pipelines themselves are seldom profitable. That, he says, is why it is difficult to get them built, particularly when they transit more than one country. "The more stockholders and countries involved, exponentially [it] makes the project more difficult and time consuming."
At least one of the rival oil pipelines is likely to be built. But the winner of the race is still in doubt.
