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. Last Updated: 07/27/2016

Balkan Pipeline Carries Higher-Export Hopes

The head of a Balkan conglomerate planning to build a $575 million oil pipeline from the Black Sea to the Adriatic is in Moscow this week for discussions that could open a new outlet for Russian oil by the end of 1990s.

Vuko Tashkovich, president of AMBO Corp., a venture launched last November jointly by the governments of Albania, Macedonia and Bulgaria, said the project could be "extremely important" for the Balkan region and could boost Russian oil exports.

"We want to create a new East-West route," Tashkovich said in an interview. "It can stimulate economic development of the Balkan region and help Russia, which needs to determine how to get large quantities of oil and transport it to ports in Western Europe."

Tashkovich said talks with Russian government officials Monday were fruitful, but he did not give specifics. He also plans to meet with representatives of Russian oil giant LUKoil and the state pipeline regulator Transneft, which he hopes will be associated with the venture.

The project calls for a chain of tankers from the Russian port of Novorossiisk to take oil across the Black Sea for offloading at storage facilities at the Bulgarian port of Burgas. An 800-kilometer pipeline would then carry the oil to Vlore, on Albania's Adriatic coast.

Russia is interested in the project because the pipeline, with a capacity of 800,000 barrels a day, would provide an alternative to shipping oil through the Turkish-controlled Bosporus.

"Turkey is trying to control everything -- the straits, the pipelines, oil export," said Jury Nogotkov, a spokesman for the Russian Fuel and Energy Ministry. "Russia is against this policy. It has its own interests. So we support any useful project which creates additional opportunities."

The Turkish government imposed restrictions on the passage of supertankers last July, citing the need to improve the safety and environmental controls following the disastrous collision of two Greek-owned tankers in the straits in March 1994.

Russia, however, has opposed the restrictions, which run counter to its efforts to boost hard-currency oil exports through Novorossiisk. It has not supported plans for new pipelines through Turkey, which would loosen Russia's grip over the flow of oil from Kazakhstan and Azerbaijan.

AMBO, by transporting oil and oil production to refineries in the Balkans or possibly Italy, intends to get oil on the world market more economically, more safely and more efficiently than at present, Tashkovich said. He said the 36-inch diameter pipeline, which would be completed by the late '90s, would have a lower shipping tariff than its competitors to attract customers and generate new demand.

The European Bank for Reconstruction and Development will cover 3 percent of the construction costs, Tashkovich said, adding that the Overseas Private Investment Corp. and First Boston would also participate as financiers.