October 3, 2008

Germany’s Ilf Joins Burgas-Alexandroupolis Project As Technical Consultant

MOSCOW. Oct 3 (Interfax) - Members of the Trans-Balkan ipeline B.V. () supervisory board have unanimously approved Germany's ILF Consulting Engineers as a technical consultant in the project to build the Burgas-Alexandroupolis oil pipeline, Russian pipeline operator Transneft (RTS: TRNF) said in a statement citing the TBP press service.

ILF will carry out a wide range of work to update the feasibility study for the project, which will enable TBP to receive the documentation it needs to initiate the detailed drafting of the pipeline, attract funds, purchase materials and equipment and select a general contractor.

The feasibility study, which ILF prepared several years ago, needs to be updated due to changes in the cost of metal and pipes in addition to several other factors. The updated feasibility study was to be prepared by late 2008 or early 2009.

The Balkan oil pipeline, Burgas-Alexandroupolis, will be 285 kilometers long and will have annual throughput capacity of up to 35 million tonnes, with an option of its further increase to 50 million tonnes. The pipeline will carry crude to Europe bypassing the Bosporus Strait. It will stretch out from the Bulgarian Black seaport of Burgas to the Greek Mediterranean seaport of Alexandroupolis. The project carries a cost of $900 million.

The owner of the future pipeline is Trans Balkan Pipeline BV. The Russian pipeline consortium owns a 51% stake in this company. The consortium includes Transneft (33.34%), Gazprom Neft (RTS: SIBN) (33.33%) and Rosneft (RTS: ROSN) (33.33%). The remaining 49% stake in Trans Balkan Pipeline is divided between Bulgaria's project company Burgas- Alexandroupolis BG (24.5%), Greece's Hellenic Petroleum and Thraki (23.5%) and the Greek government (1%).

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