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Black Sea news roundup

The Black Sea region has been a hub of oil and gas activity since the 1980s, when the Soviet Union began drilling off the coast of Ukraine. The following years saw the discovery of major new oilfields in the region, prompting a spate of foreign investment that continues to this day. Here, we take a look at the biggest recent developments in Black Sea oil and gas.

Turkish Stream breakthrough: Gazprom given green light for survey work

The Turkish Stream project received positive news this month following weeks of anticipation, with the news that Turkey's government has given Gazprom approval to carry out essential offshore engineering surveys.

In a statement, the Russian state-owned oil and gas company explained that the new agreement gives it permission to roll out the first phase of the project in the Turkish Exclusive Economic Zone and within the country's territorial waters.

Approval came a fortnight after Turkey received coordinates for the planned route of the Turkish Stream pipeline and confirmed that it would not result in territorial conflict with its Black Sea neighbour, Bulgaria.

The project intends to carry Russian natural gas under the Black Sea to the region of Thrace in north-west Turkey, where it will then be routed to Greece and on into the rest of Europe.

When finished, the offshore part of Turkish Stream will comprise four pipelines, each of which will be capable of transporting 15.75 billion cubic metres (bcm) of natural gas. They will run for 660 km through the old South Stream route beneath the Black Sea, before taking a new 250 km route towards Thrace.

Preliminary deal between Russia and Greece on gas pipeline

As well as making strides on Turkish Stream work in the Turkish part of the Black Sea, Russia has struck a preliminary deal with the Greek government to move its natural gas on into Europe.

Under the agreement, work on a new pipeline - which will have a volume of 47 bcm of gas - will begin in 2016 and end in late 2019.

According to Russian energy minister Alexander Novak, a 50-50 joint venture between the two countries will be created to carry out the project, with the pipeline ultimately set to be owned by the newly formed company.

Russia's half of the venture would be owned by an arm of state development bank Vnesheconombank, while the Greek stake will be held by a newly created state energy investment company.

However, the deal is not legally binding, and Novak accepted there is still some way to go before it is finalised.

"In general, the memorandum is only the start of the realisation of the project. It will be worked on," he was quoted by the Wall Street Journal as saying.

Bulgaria tells Russia of gas hub plan

Bulgaria has again informed Russia that it plans to build a gas hub to transport Black Sea gas to the rest of Europe.

Temenuzhka Petkova, Bulgaria's energy minister, told her Russian counterpart Alexander Novak that the country is keen to establish a transceiver in the Black Sea city of Varna to carry Russian gas.

Petkova was quoted by the Bulgarian energy ministry as saying that the European Commission is already familiar with its plans, reports local news agency Novinite.

Novak said the initiative - which would provide an alternative way to bring Russia's natural gas to central Europe - was originally presented to Russia six months ago.

Bulgaria hopes to receive a response from its Black Sea neighbour by the end of July.

Three Black Sea nations reach gas pipeline accord

Azerbaijan, Georgia and Romania have signed a joint declaration on the development of a new interconnector that would help to transport Azerbaijani gas to Romania and other European countries.

The Azerbaijan-Georgia-Romania Interconnector (AGRI) project is part of the Southern Gas Corridor - an initiative that seeks to bring natural gas from Azerbaijan to the Georgian Black Sea coast via pipeline, where it would be liquefied at a dedicated terminal and delivered by tanker to the Romanian port of Constanta. Once there, it would be gasified and sent via existing infrastructure to other parts of Romania and Europe.

According to AzerNews, preliminary estimates suggest the cost of the AGRI project will be between €1.2 billion and €4.5 billion ($1.3 billion and $5 billion). This will ultimately depend on the capacity of the terminals, which could be up to eight bcm of gas per year.

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