Home Finance Bulgaria’s dispute with Lukoil could turn into regional oil crisis – EURACTIV.com

Bulgaria’s dispute with Lukoil could turn into regional oil crisis – EURACTIV.com

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The rapid withdrawal of the exemption for the import of Russian crude oil for the Bulgarian refinery of the Russian company Lukoil could potentially lead to a crisis in the fuel market in the Balkan region, Bulgarian Prime Minister Nikolai Denkov warned in a exclusive interview for Euractiv Bulgaria.

Currently, two of Bulgaria’s Euro-Atlantic parties – GERB and DPS – are in favor of the idea of ​​immediately withdrawing the exemption for the import of Russian oil to Lukoil.

The government is negative and warns of serious risks if the Bulgarian refinery, the largest in the Balkans, is forced to stop work due to a lack of oil.

“Yes, the market is open, maybe after a while it can recover thanks to imports, maybe after a while the refinery will resume, but no one has done it to find out how much it costs and how long it will take. With all the political and economic instability – because it is a problem for people, prices can rise significantly,” Denkov said.

He cited as an example the fact that the Lukoil refinery is the only supplier of aviation fuel in Bulgaria. “Anyone who underestimates these risks is playing with fire,” the Prime Minister said.

He explains that the Bulgarian government will quickly develop the project of an oil pipeline connecting the Greek port of Alexandroupolis to Burgas, based on the interconnection model with Greece, through which Azerbaijani gas can reach other Balkan countries.

Denkov stressed that regional interest in the pipeline is high and “there is no doubt that it is economically profitable if combined with the operation of the Burgas refinery.” This is related to how the efficiency and future of the Burgas refinery are assessed: the situation would be different if it were “enveloped” by an oil pipeline, Denkov said.

The intention of the Bulgarian side is to build a pipeline for the export of already produced fuels, and in the event of a problem on the market, Bulgaria will be able to quickly import from Greece.

Romania is also interested in the pipeline to Burgas, considering financing an extension of its border.

The project and the extension of the pipeline to northern Romania were among the topics discussed during the tripartite meeting of the prime ministers of Bulgaria, Greece and Romania on October 9 near the Bulgarian city of Varna, on the black Sea.

The change with the pipeline project, known as the “Grand Slam”, agreed by pro-Russian Bulgarian President Georgi Parvanov and Vladimir Putin in 2008. The original project called for a pipeline from Burgas to Alexandroupolis to transport Russian oil . to Greece. It is now a matter of securing oil supplies to the Mediterranean region without going through the Bosphorus.

“Bulgaria wants a sufficiently reliable supply so that tankers do not pass through the straits,” the prime minister told Euractiv.

Nikolai Denkov said Bulgaria will have control of the pipeline so that the country is not dependent on “other factors.”

“The idea is to create a company that will build the pipeline and operate it, like the project company that built and operates the Interconnection with Greece (ICGB),” he explained. .

Part of the route of the Bulgarian gas interconnection with Greece will also be used, as it is already subject to an environmental assessment.

“We are discussing from Greece so that the pipeline goes to Stara Zagora and becomes part of the entire Bulgarian industrial complex in the region,” Nikolai Denkov also declared.

The idea of ​​an oil pipeline between the two ports – Burgas and Alexandroupolis – has existed since the early 1990s.

In 2007, a tripartite agreement was signed at the headquarters of the Russian company Transneft to create an international project company for the construction of Burgas-Alexandroupolis between the Greek, Bulgarian and Russian parties. The idea was to build a 285 km long pipeline, with a capacity of up to 35 million tonnes, to transport oil, bypassing the congested Bosphorus. However, the project was not realized.

The caretaker government of Bulgarian President Rumen Radev unblocked the idea with the aim of providing alternative sources of oil to Lukoil, given that the exemption for the import of Russian oil by sea to Bulgaria expires at the end of 2024.

Interest in new nuclear power plants

The Bulgarian Prime Minister told EURACTIV that Greece, Serbia and North Macedonia wish to conclude long-term contracts for the purchase of electricity from the future units 7 and 8 of the Kozloduy nuclear power plant, which will use AP1000 nuclear reactors.

Asked whether it was possible to obtain European funding for the construction of the new facilities, Denkov replied that this was not a major problem, as the project seemed “quite promising” for the state of an economic point of view.

“There is interest from different countries. We need to model the way electricity is purchased. There is most likely interest from Greece, North Macedonia and Serbia. But they should decide what they prefer, just as we must decide what is more profitable for us – either entering as an investor in the project or having fixed contracts for the purchase of electricity. From what I hear, it seems that they prefer the second option, but the discussion is open,” Denkov commented.

He added that Bulgaria will use the two new reactors as core capacities of the energy system during the phase-out of coal.

(Krassen Nikolov, Emiliya Milcheva | Euractiv.bg)

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