Greece, Bulgaria discuss oil pipeline bypassing Bosphorus Strait

A European Union embargo on Russian oil that takes effect on Monday has led Greece and Bulgaria to talk about reviving a long-defunct oil pipeline project that bypasses the Bosphorus Strait.

The pipeline would run 280km (about 174 miles) from the port of Alexandroupolis on the Aegean Sea to the port of Burgas on the Black Sea, and might continue as far north as the port of Constanza in Romania, Bulgaria’s Energy Minister Roman Hristov told Al Jazeera.

“We have a two-year derogation [from EU sanctions] to buy Russian oil, but after that, we will face problems because of the hike in transit fees through the Bosphorus,” Hristov said in answer to a question from Al Jazeera at an energy conference in Athens.

So, we have begun discussing the revival of the Burgas-Alexandroupolis pipeline, and its extension north to the ports of Varna and Constanza,” he added.

“We support the project,” said Greek Energy Minister Kostas Skrekas in a statement. Neither minister agreed to answer further questions.

The EU move disrupts tanker trade from Russia’s oil export terminal at Novorossiysk on the Black Sea’s east coast to EU ports on its west coast.

Other suppliers

Refineries at Burgas and Constanza can still buy oil from Kazakhstan and Azerbaijan.

A Kazakh oil pipeline ends at the Caspian Pipeline Consortium (CPC) Terminal near Novorossiysk, and an Azeri oil pipeline terminates at Georgia’s Supsa further south.

But it is not enough to satisfy their needs, especially when Ukraine’s needs are taken into account.

The deficit is filled by additional volumes from other sources that are shipped into the Black Sea through the Bosphorus Strait.

The original Burgas-Alexandroupoli pipeline idea, first aired in 1993, was to flow south, exporting crude oil from the Black Sea to the Mediterranean and beyond.

“The real problem was delays and bottlenecking at the strait. This is very easy to overcome with a pipeline,” said Mike Myrianthis, a Greek oil industry veteran who was involved in the project at the time.

“We wanted to be tied to a major producer for long-term supply … There was a very good relationship with Russia then,” he told Al Jazeera. “I remember we were talking about a second, parallel pipeline.”

In 2007, Greece, Bulgaria and Russia signed a political agreement to build the pipeline, with Russia promising to provide 35,000-50,000 tonnes of oil a year to fill it.

A 650,000-tonne tanker farm in Alexandroupolis would ensure a constant supply to ships.

But Bulgaria pulled out of the project in 2010, citing environmental concerns. Industry insiders tell Al Jazeera it was US opposition to dependence on Russian oil that scuppered the project.

But Russia would not benefit from the north-flowing pipeline, and the idea has acquired new urgency with Western sanctions on Russian oil, which the International Energy Agency assumes to be permanent.

Last October, Turkey added impetus to the pipeline when it hiked transit fees for tankers using the Bosphorus Strait fivefold to $4 per tonne of oil, adding about half a percentage point to current oil prices.

Turkey would raise its income from transit fees from $40m to $200m a year, according to the Daily Sabah newspaper.

Turkey has its own plan to bypass the congested Bosphorus with a waterway running west of it. President Recep Tayyip Erdogan proposed Canal Istanbul amid great fanfare in 2011, but construction has not yet begun.

Geopolitical contest

Until the war in Ukraine, oil and gas pipelines flowed south from Russia through Ukraine and the Balkans.

The Ukraine war has thrown Greece and Turkey into geopolitical competition, as Alexandroupolis has begun to reverse these energy flows, while Turkey is becoming Russia’s new southern conduit.

“The idea is to create a north-south pipeline axis for gas and oil, which will also be reinforced by rail transport. All this network is ultimately meant to end up in Ukraine so even that country can be supplied from the south,” said Myrianthis.

In this contest, Greece’s region of Western Thrace has already become an important alternative to the Bosphorus.

A 2019 defence agreement has allowed the United States to use the port of Alexandroupolis as a logistics base to ship supplies and reinforcements to forward NATO members Bulgaria and Romania, and weapons into Ukraine itself.

The border of Romania with Moldova and Ukraine is only a day away from Alexandroupolis by rail, a faster transit than through the Bosphorus, and a more dependable one since Turkey announced it was closing the strait to all military traffic in response to the war in Ukraine.

Last May, Russia cut gas flows to Bulgaria, ostensibly because it refused to pay in roubles.

Greece has since become Bulgaria’s sole source of gas, which travels from Azerbaijan across Turkey and northern Greece through the Trans-Adriatic Pipeline (TAP).

An Interconnector Greece Bulgaria (IGB), operational since October, siphons off a billion cubic metres a year from TAP to the Bulgarian gas network.

By the end of 2023, Alexandroupolis will acquire a floating storage and regasification unit (FSRU) to import liquefied natural gas (LNG), and the IGB pipeline will be extended 28km (about 17 miles) south to reach it, further eroding the Russian gas monopoly in Southeast Europe.

There is talk of a second IGB pipeline being built parallel to the first, and of at least two more FSRUs.

Greece-North Macedonia pipeline

Greece is in discussions with North Macedonia to build a separate gas pipeline to that country.

Greece, which plans to export 8.5 billion cubic metres of gas to the Balkans by 2025, is fast becoming the main supplier of non-Russian gas to the region.

The Burgas-Alexandroupolis oil pipeline would add another dimension to its role as a provider of energy security.

Turkey, too, has acquired geopolitical weight as Russian energy is gradually dislodged from Eastern Europe. Three Russian gas pipelines already enter Turkey.

At a meeting with Erdogan in Astana, Kazakhstan on October 13, Russian President Vladimir Putin announced he was prepared to build a fourth, turning Turkey into an export hub for Russian gas.

“If there is an interest in Turkey and our potential buyers in other countries, [we] could consider building another gas pipeline system and creating a gas hub in Turkey for sales to other countries, to third countries, primarily, of course, to European ones, if they are, of course, interested In this,” Putin was reported as saying.

Turkey has welcomed the project.