AMBO pipeline deal clears another hurdle

14/02/2007

A plan to transport Caspian oil across Bulgaria and Macedonia to the Albanian port of Vlora is closer to becoming reality.

By Marina Stojanovska for Southeast European Times in Skopje --14/02/07

photo

Construction on the pipeline is expected to begin in 2008. [Getty Images]

The AMBO pipeline deal cleared another obstacle late last month, as economy ministers from Albania, Bulgaria and Macedonia signed an agreement in Skopje providing for construction to begin next year. The first oil is expected to be pumped through the pipeline in 2011.

"There is a lot of work ahead," said AMBO President Ted Ferguson. "Environmental studies should be conducted and construction licenses should be obtained so that the construction starts in late 2008."

Conceived in 1994, the AMBO project has been held up for years, as regional instability and conflicts kept investors at bay. Meanwhile, the Baku-Tbilisi-Ceyhan pipeline has stolen the spotlight.

Momentum finally picked up in July 2003, with the signing of an agreement by the presidents of Albania, Macedonia and Bulgaria. On December 27th, 2004, the three countries' prime ministers signed a political declaration, followed by a Memorandum of Understanding between country representatives and Ferguson.

On October 30th 2006, Albania and Macedonia signed a protocol on the entrance points of the pipeline -- the Albanian village of Stebleve and Macedonian village of Lakaica. A similar protocol between Bulgaria and Macedonia was signed later in 2006.

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The pipeline will pump Caspian oil from the Bulgarian port of Burgas via Macedonia to Vlora, for transport to European countries and the United States. Four pump stations -- two in Bulgaria and one each in Macedonia and Albania -- will be constructed along the route.

The pipeline will be 894km long, with 273km passing through Macedonia. It is expected to have a capacity of 750,000 barrels of oil per day. The annual transit of crude oil will be 30m-40m tonnes and the whole investment will amount to $1.2 billion. About 80% of the funds have been provided so far. Ferguson said no difficulties are expected in ensuring the rest of the financing.

"The countries directly involved in realisation of the pipeline will benefit from oil transport transit fees, which are estimated at $30m on an annual basis for Macedonia," Macedonian Minister of Economy Vera Rafajlovska said. "The pipeline will also create new jobs and foster the economic development of the countries."

For Albanian Minister Genc Ruli, the project has a broader impact. "The pipeline will contribute to integration development and stability in the region not only in terms of energy, but in wider terms," he said.

This content was commissioned for SETimes.com.
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