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By John Helmer, Moscow

Russia’s state pipeline company Transneft went public yesterday morning with an attack on the Prime Minister of Bulgaria for dragging his feet over the trans-Balkan pipeline proposed between Burgas and Alexandropouli, on the Aegean Sea. Transneft chief executive Nikolai Tokarev was reported by Moscow news wires as saying: “God save anyone from partners like our Bulgarian friends.”

Bulgarian government sources in Moscow responded by telling Fairplay that Tokarev’s complaining about administrative delay in Sofia is unfounded. “The official position of Bulgaria”, the sources say, “is that it is necessary to wait until the environmental check is carried out and until the expert report proves that the project will not damage the ecological balance of the Bulgarian waters.”

Igor Dyomin, Transneft’s spokesman, counter-attacked, telling Fairplay: “The Bulgarian side has three times given negative conclusions on the ecology [of the pipeline project] with the suggestion that the project should be improved. The last time their arguments were totally factitious, and we have got the impression that they intend to play for time instead of working on the project.”

Borisov has been pursuing delay tactics and repetitive environmental impact analyses of the trans-Balkan pipeline since he was first elected prime minister in July 2009. Now there is fresh political sensitivity attached to the pipeline decision , because hotly contested presidential elections are due in Bulgaria this October. The Burgas pipeline has been a whipping-boy for anti-Russian sentiment among Bulgarian voters on whom Borisov’s majority in parliament depends.

Ironically, Monday’s Transneft attack on Bulgaria confirms that the alternative route for the oil pipeline from Samsun to Ceyhan, Turkey, which Transneft announced a year ago as its preference, has failed to get approval in Ankara, obliging the Russians to fall back on the 15-year old Burgas-Alexandropouli plan.

This is planned to run for 279 kms and carry 675,000 barrels per day.

Tokarev’s broadside at the Bulgarians is not his first. Last year he appeared to say that if the Turks were willing, Tokarev was ready to wash his hands entirely of the Burgas-Alexandropouli pipeline.

But asked today if the unwillingness of the Turks to approve the 555-km, 1.5 million barrel per day pipeline – twice as long, and twice the capacity of the trans-Balkan route — has increased Tokarev’s dependence on Bulgaria and Borisov for the go-ahead, Dyomin said: “There hasn’t been a decision to cancel the Samsun-Ceyhan project. The talks with the Turkish side are going on slowly, and we are discussing the economic issues. According to the preliminary calculations, the cost of transporting one tonne of oil [by the Samsun-Ceyhan pipeline] is $25 to $30, while carrying the same tonne of oil through the [Bosphorus] straits by tanker is worth $2. The Burgas-Alexandropoulos pipeline transportation cost is around $8 per tonne, but the Bulgarian position is not clear. They are neither rejecting nor confirming it.” According to Transneft, “there is no rivalry between the two projects.”

Transneft’s Tokarev rarely speaks his mind in public, but he recently attacked China for its oil pricing demands, only to concede after negotiations. This time he is touting a new Russian crude pipeline route from Constanta (Romania) to Trieste.

Notwithstanding the Russian inducements and threats to take the oil elsewhere, the government in Ankara has already shown its reluctance to allow Russian oil exporters to increase their market share of oil and refined oil products supply, and oil transportation in Turkey. Between 2006 and 2007 LUKoil was denied permission for a plan to build and supply a new refinery at Zonguldak, on Turkey’s Black Sea coast, 400 kms to the west of Samsun. Since 2005, the Turks have also refused versions of the Samsun-Ceyhan project when they were proposed by Eni of Italy and the Calik Holding, a domestic group.

In a separate development this week, Russia’s Finance Ministry signaled that it is getting ready to charge Turkey much more for its current supplies of Russian gas. The proposal is to reintroduce Russian export duties on natural gas supplied to Turkey through the Blue Stream pipeline, under the Black Sea, which commenced shipments in 2003. But the export duty on gas shipped to Turkey had been cancelled by an intergovernmental agreement of 1999. If that agreement were now to be cancelled, Turkish consumers of the Blue Stream gas would face an extra Gazprom bill for the 30% duty levy on shipments.

A report by Alfa Bank today indicates: “given that Turkey consumes around 13bcmpa [billion cubic metres per annum], we estimate that reintroduction of the export duty at the level of 30% may provide the country’s [Russia’s] budget with some $1.5-1.7bn (RUB42.7-50bln).” That’s an unfriendliness penalty for Ankara of the same amount. If the Turks retaliate, Alfa Bank energy analyst Pavel Sorokin also acknowledges, “the move may further reduce sales volumes to Turkey. Another point of concern is that the move may undermine the negotiations process on the South Stream pipeline.”

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