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Russia suggests creating oil consortium in Black and Mediterranean seas region

Russia has suggested creating a consortium to manage oil flows in the Black and the Mediterranean seas region. A single international company could coordinate oil deliveries through the Burgas-Alexandropoulos and the Samsun-Jeikhan pipes currently under construction, the head of the Russian Transneft company, Nikolai Tokarev, said. The first of these pipelines with the annual capacity of 35 mln tons is due to run under the Black Sea, from Russia to Bulgaria and Greece. It will allow using fewer tankers to transport oil through the straits of the Black Sea. The second pipeline will cover the Turkish territories, from the north to the south, bypassing the Bosphorus. This pipe is expected to be filled with oil from Russia, Kazakhstan and probably Azerbaijan. The project is being operated jointly by Russia, Italy, Turkey, Greece and Bulgaria. Other companies, for example the US Chevron which operates in the Caspian region, have also demonstrated their interest in the project.

First of all, the idea of an international consortium is meant to settle some economic tasks, says Leonid Grigoriev, President of the Institute of Energy and Finance: "What is common about the Samsun-Jeikhan and the Burgas-Alexandropoulos projects is that the oil-either from Russia or from Kazakhstan- will first be pumped to the Black Sea region, and then it expected in the Mediterranean. It means that these two projects are interconnected. This is a classical scheme of coordinating oil flows which helps to avoid unnecessary costs". The global financial crisis has certainly affected the oil demand but by the time the two pipelines are commissioned, the situation will improve. Participation of oil producers and oil consumers in the consortium will make the supplies even more reliable, says Konstantin Simonov, Director of the National Energy Security Fund: First Russia suggested a consortium to the states involved in the Burgas-Alexandropoulos project, which bypasses the Turkish straits but leaves out Turkey itself. Then Russia and Turkey witnessed an improvement in their bilateral relations, and very soon Moscow joined the project on the Turkish territory. But what is the need to develop the two competitive projects at a time? This issue is yet to be resolved. Experts foresee more countries to approve the idea of the consortium which certainly meets their economic interests. All the more so as cooperation with Rosneft, Transneft and Italy`s ENI promises reliable profit.

Source: Voice of Russia, 29.03.2010


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