Interview with Leonid Grigoriev

Leonid Grigoriev, the President of the Energy and Finance Institute, spoke on RT about the importance of the Balkan Energy Summit that will take place in Croatia on June, 24.

Russia Today: The Croatian capital Zagreb is playing host to the Balkan Energy summit. Leaders of ten South-eastern European nations will discuss energy co-operation and pipeline projects. The region is becoming an increasingly important energy transit hub.

On Sunday, Russia's President Putin will be attending the summit at the special invitation of the Croatian President Stjepan Mesic.

Can you tell us about the region's importance?

Leonid Grigoriev: The region itself consumes some oil and gas. But basically it's the gateway to Europe. I would suggest sophisticated observers to focus on Trieste, which is a piece of Italian territory near Slovenia, and any oil coming, for example, to Turkey would go by tankers probably to Trieste or some other ports. New projects, which we are discussing  now and will probably discuss in Zagreb, is for moving ours and Kazakhstan's oil from the Caspian region, across the North Caucasian region to Novorossiysk, then by tankers to Burgas and by pipeline to Alexandropoulos which would go, probably to Trieste. And the potential is to turn this pipe north, across Croatia and Slovenia, and, probably, part of Serbia, bringing these millions of tonnes of oil directly to Trieste, which has huge refineries and pipelines to Central Europe – Germany and other countries.

RT:  What are the major routes to transport Caspian oil to Europe?

L.G.: It's this year's hot topic – how oil and, potentially, gas from the Caspian region would be transported. The Caspian Sea now is non-crossable because of unresolved legal issues and because everybody is expecting more discoveries and explorations. So, the easiest way now is to go north from the Caspian Sea, crossing Russia. And after that the problem is to load more pipes to Ukraine – probably would be too much for one country, and going north is too far. So, we have two competing projects: one is Baku-Tbilisi-Ceyhan oil and gas pipelines, and the other is across Russia, the Black Sea and then Burgas- Alexandropoulos. So, it's kind of north and south routes, and the north one is probably more economical.

RT:  How would you assess these projects?

L.G.: From the economic point of view, the cost of building and delivery is similar. Still, I believe that it's more interesting for the countries of transit. Turkey has, and potentially will have a lot of pipelines and will be paid for them. But for Bulgaria, Serbia, Croatia, for countries that are developing their industry there's also a need of cash. So, for them that would be a lot more interesting.  

RT:  What are the benefits of being a transit state?

L.G.: Well, we are the transit state. We have some money for it – for example for transporting Turkmen gas to Ukraine we have certain amount of money. I know exactly what the benefits are for transporting gas – it's about $US 1.5 -1.7 for 100 KM for 1,000 cubic metres.  For oil the price is similar. So, it means that if millions of tonnes of oil go through the country after the pipeline is built – which also gives some contracts to local builders, gives them jobs- the budget of this country has a kind of permanent income. It depends on the length of the pipeline. The country that has about 300 KM, may probably have $US 300 MLN cash for the budget, which is a very good deal for this country.