BULGARIA: 9 Banks Keen to Advise Burgas-Alexandroupolis Pipeline Project

Nine banks have handed in their credentials to advise the Burgas-Alexandroupolis oil pipeline project, said Burgas-Alexandroupolis BG, the outfit in charge of Bulgaria's share of the venture.

The advisory contract will be contested by France's Calyon, Societe Generale, BNP Paribas, ING, Project Finance Solutions, RBS, Lazard, Citi Group and Gazprombank.

The selected consultant will use the technical and economic feasibility studies as a baseline to draw up the documents needed to apply for loan financing and research the market interest towards the project, said Stefan Gunchev from the regional development ministry.

The official said the advisor is expected to be picked in August.

Germany's ILF should update the feasibility study for the project by the end of 2008.

The facility will cost EUR 1.5 bn, judging by statements from Nikolai Seryogin, member of the supervisory board of the international project company in charge of the pipeline. The figure is significantly higher than the initial price tag that was seen at around EUR 800 mln.

The shareholders in the project company will contribute 30% of the necessary financing, securing the remainder from external sources.

Russia's Transneft, Rosneft and Gazpromneft control a combined 51% in the project company. Bulgaria and Greece each have 24%.

Bulgargaz and Technoexportstroy, the co-owners of Burgas-Alexandroupolis BG, will have to raise EUR 110 mln in funding.

The Russian media have reported that problems with the taking of private land for the project will cause the pipeline to be rerouted on Bulgarian territory. The Bulgarian side had previously reported no difficulties with the expropriation of private land.

Source: Dnevnik a.m.