The Bulgarian Council of Ministers has decided to terminate the Republic of Bulgaria’s participation in the tripartite agreement, concluded on 15 March 2007, between the governments of the Russian Federation, Republic of Bulgaria and Hellenic Republic.

The tripartite intergovernmental agreement related to the co-operation in the construction and operation of the Burgas to Alexandroupolis oil pipeline. Bulgaria suggests that the oil pipeline agreement be terminated by mutual consent, and has said that if this does not occur within the next year, Bulgaria will withdraw on its own. The Bulgarian Government’s said its decision was based on conclusions reached by the international project company during the first stage of work on the pipeline. According to analyses performed during the project’s development phase, the Burgas to Alexandroupolis oil pipeline cannot be implemented under the conditions stipulated in the 2007 agreement. The Council of Ministers has also adopted a decree whereby the capital of the Bulgarian shareholder in the international project company will be increased. The over $US8.5 million in funds will be used to settle the liabilities of the company to the other shareholders and to the international project company.

The Burgas to Alexandroupolis oil pipeline aims to create a new transportation route for shipping Russian and Caspian origin crude oil by tankers from Russian Black Sea ports to the port of Burgas in Bulgaria, and then via the pipeline to the port of Alexandroupolis in Greece, with further loading onto tankers and delivery to the European and world markets.

The possible throughput capacity of the pipeline at the first stage is to be approximately 35 MMt/a with possibility for further increase up to 50 MMt/a.