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Gazprom Neft says pipeline bypassing Bosporus to cost $1.2 bln

A planned oil pipeline to bypass Turkey's strait linking the Black Sea to the Mediterranean would cost over $1.2 billion, a Russian contractor from Gazprom's oil-producing arm, Gazprom Neft, said Wednesday.

Nikolai Seryogin told the Fifth Russian Petroleum and Gas Congress that the planned $900 million pipeline between the Bulgarian port of Burgas and Greece's Alexandroupolis would be more expensive that previously thought, because of projected inflation, and likely growth in metals and pipe prices. However, he said the expenses would be justified, as oil producers are currently losing up to $750 million annually due to oil tankers moving between the Black Sea and the Mediterranean becoming stuck in the narrow, crowded Bosporus strait.

Seryogin said the pipeline's capacity could be increased from 35 to 50 million metric tons per year (1 million barrels per day), due to expectations of additional crude supply totaling 45 million tons per year from the Caspian Pipeline Consortium 2 project, which he said could not realistically be brought to the world markets by sea. The 280-km pipeline will be owned by a company in which a Russian venture, set up by state-controlled Gazprom Neft, Rosneft, and Transneft will hold 51%. Bulgarian and Greek partners, still to be determined, will have 24.5% each. Seryogin said an international design company will be set up by the end of the year to make a feasibility study. (rian.ru)