Russia, Greece and Bulgaria to sign Balkan oil deal

This tripartite agreement to build the 280-kilometre pipeline has been repeatedly delayed by the three countries over the past 15 years, namely because the Russians did not believe it could be economically viable.

Experts now believe that with the rise in oil prices, the project could at last become a reality by bringing cheaper Russian crude to the Mediterranean and ensuring Moscow's hold on the region's energy market.

For years the three countries have also disagreed on other key issues, namely who would be responsible for building the pipeline, transit fees and ownership of the terminals.

The 700-million-euro (924-million-dollar) oil pipeline, looks to bypass Turkey's busy Bosphorous Strait and will carry oil from Bulgaria's Black Sea port of Burgas to the Greek port of Alaxandroupolis.

The project is set to be completed by 2010 and is designed to reduce the cost and time of transporting Russian oil from the Caspian Sea to Europe and the United States.

Currently thousands of tankers are transporting crude oil across the Bosphorus Straits, but increasingly congested traffic over the years has made the task environmentally unsafe.

The pipeline, seen as a strong foothold by Russia into Europe's energy market, will initially carry 700,000 barrels of oil a day with the possibility of reaching more than 1 million barrels a day.

Thursday's agreement will be signed by Russian President Vladimir Putin, Bulgarian Prime Minister Seigei Stanishev and Greek Prime Minister Costas Karamanlis.

The project will be built and operated by a consortium of companies including Russia's three main state oil producers Gazprom Neft, Transneft and Rozneft which will control 51 per cent of the pipeline as well as Greece's Hellenic Petroleum, Petroleum Gas and Bulgaria's Bulgargaz.

The pipeline will serve as a main rival to the new 2-billion-euro Baku-Ceyhan pipeline from Azerbaijan to the Mediterranean that bypasses Russian soil and will pump 400,000 barrels a day of crude oil to international markets.

Greece is also participating in a Turkish-Greek-Italian pipeline deal which will pump natural gas from the Caspian Sea and the Middle East to Europe by early next year. Deutsche Presse-Agentur