Serbia, Croatia: Five Countries Join for Oil Pipeline Construction
Five countries are expected to sign an agreement in January to build an oil pipeline from Romania to Italy as the Cabinet ministers from Romania, Serbia, Croatia, Slovenia and Italy are expected to meet in Rome to agree on the establishment of a development company for the construction of 1,500km pipeline.
The project, which includes rehabilitating Romania's Black Sea port Constanta, would cost about $2.4bn.
People involved with the project said that the two oil companies, one international energy group and one state-owned energy company, had expressed interest.
The pipeline is expected to feed refineries in south-eastern Europe, Italy, Austria and Bavaria.
Two pipelines that will originate in Burgas, Bulgaria, will compete with the so-called Pan-European Pipeline from Constanta to Trieste.
One would send oil to Alexandroupolis in Greece, the other to Vlore on Albania's Adriatic coast.
In total, a dozen pipelines are proposed for the region.
The most significant new pipeline is the BP-led Baku to Ceyhan line, expected to open in the spring.
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20 December 2005,
[Presenter] A series of talks have been held in Moscow on supplies of Russian gas. For Belarus, which is part of the union state [of Russia and Belarus], the fuel price will remain subsidized. As for Ukraine, according to the latest reports from Gazprom, the Ukrainians have effectively refused to take any decision on the gas problem. All the details are in this report from Sergey Babayev.
[Correspondent] During the past week the subject of gas has become so sensitive that journalists at Government House were not even allowed to hear the prime ministers' introductory speeches. Once again the two sides have failed to reach agreement behind closed doors. The problem has once again been delegated to the companies involved, Gazprom on the Russian side and Naftohaz [Ukrayiny] on the Ukrainian side. However, even so, it is not clear who in Kiev there can be a dialogue with.
[Sergey Kupriyanov, press spokesman for Gazprom] The most frightening thing is that it is not clear who should take this decision. Because everybody is afraid of this. They all toss responsibility back and forth. The company to the government, the government to the company, and we simply have nobody with whom to negotiate and hold substantive talks on this question, which is extraordinarily important for the entire economy of Ukraine.
[Correspondent] Some experts doubt that agreement will be reached before the New Year. But everybody knows that Russia is capable of taking tough and decisive action in such situations. Two years ago there was a very similar gas crisis with Belarus. Minsk refused to extend the contract, tried to bargain and even siphoned gas from the transit pipeline. Moscow simply closed the gas pipeline. European customers, who were left without fuel for several hours, understood why these steps were being taken. Half a day's gas blockade proved more effective than months of effort by diplomats and businessmen. Compromise was swiftly reached and since then the sides have decided everything on time.
[Belarusian Prime Minister Syarhey Sidorski] A total of 21bn cubic metres of gas will be supplied to Belarus in 2006 at a price of 46.68 dollars [per 1,000 cu.m.].
[Correspondent] Prices as low as this are possible because Russia and Belarus are building a union state. As far as the dispute with Ukraine is concerned, an unnamed participant in the talks on the Russian side put it this way. Kiev realizes it is necessary to switch to market principles for both gas supplies and for transit, but simply does not want to agree that the time to do this has already come. Today the EU, which recently granted Kiev market economy status, was asked to explain this to Ukraine.
[Sergey Yastrzhembskiy, aide to the president of the Russian Federation] It is embarrassing to have to point out simple truths, but market economy status should probably end all talk of barter and so forth. The professors of the EU evidently need to talk about this with decision-makers in Ukraine.
[Correspondent] Gazprom denies that it sharply increased prices for Ukraine during the week. The price of 160 dollars for 1,000 cu.m. has been on offer since spring. But Kiev did not want to discuss this offer. Now, as is the case with Europe, the gas price will not be fixed but will fluctuate according to the prices of other fuels, in other words about 220 dollars.
The Ukrainian opposition is accusing the authorities of passing up an advantageous offer. The head of the Progressive Socialist Party, Nataliya Vitrenko, believes that Ukraine is entirely responsible for creating the gas problem. If it had not been for the orange authorities' wish to take the country into NATO, relations with Russia would be better. The leader of the Party of the Regions, Viktor Yanukovych, is convinced that the protracted dispute can now be settled only at presidential level.
This is Sergey Babayev, Artem Antonov and Andrey Lesnykh reporting for Channel One.
Source: Channel One TV, Moscow
