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. Last Updated: 07/27/2016

Gazprom Welcomes Greek Pipe Idea

Gazprom will study a Greek proposal to build a gas pipeline alongside the Burgas-Alexandroupolis oil pipeline, the company said Friday.

That pipeline would eye the same southeast European markets as Nabucco, the project to diversify European supplies by delivering gas from Central Asia.

Greek President Karolos Papoulias made the new pipeline proposal after talks with President Vladimir Putin in the Kremlin on Thursday.

The pipeline could be connected at the Bulgarian port of Burgas with a link from the Blue Stream pipeline, which takes gas from Russia under the Black Sea to Turkey, Gazprom spokesman Sergei Kupriyanov said. "This initiative is interesting," he said by telephone. "We will analyze and consider it."

Gazprom has long been looking to use Blue Stream as a link to increase supplies to southeastern Europe, and considered Greece as a possible transit country.

"But the option of Burgas to Alexandroupolis is a new initiative," Kupriyanov said. "We need to carefully calculate everything."

Greece has not shown interest previously in the project.

Blue Stream is able to carry 16 billion cubic meters of gas every year, but shipped just 5.1 bcm in 2005.

Kupriyanov expressed doubt about the future of Nabucco, whose construction is set to begin in 2008 or 2009 and end in 2012, saying the pipeline did not have a reliable resource base. Nabucco's operator, Austria's OMV, did not return a call seeking comment Friday.

Analysts in Moscow welcomed the Greek proposal. "This is a favorable political statement for Russia," said Valery Nesterov, an analyst at Troika Dialog.

The offer appears commercially viable, he said. The southeastern European market is so promising that even together, Blue Stream and Nabucco would have room for sales, he said.

But Gazprom has an edge over Nabucco thanks to its proven resources and possible lower costs due to laying the gas pipeline next to the oil pipeline, said Nesterov and Vladimir Vedeneyev, an analyst at the Bank of Moscow.

Christian Egenhofer, senior energy researcher at the Center for European Policy Studies, warned about having too high expectations for Nabucco.

"There is a difference between wishful thinking that the pipeline will decrease dependence on Russia and real possibilities," he said by telephone from Brussels.

But Vedeneyev cautioned that construction costs could rise because of a need to build a gas-liquefying plant in the Aegean port of Alexandroupolis to ship the gas further by tanker. "From the perspective of implementation, this may not prove so interesting at a closer look," he said.

What really matters, Nesterov said, is that Greece has expressed its willingness to assist Gazprom, even if the route may change.

"The practical meaning of this is that Greece is ready to become a transit country not only for Russian oil, but also for gas. And great volumes of them," he said.

Greece's proposal appears to ignore the calls of European Union officials to speak to Russia with one voice. "The reality is the opposite," Egenhofer said.