The three states have now signed an agreement to construct the 1,200-km long pipeline, which is to run from Constanta in Romania to an Adriatic oil terminal near Omisalj, in Croatia. Work on the project could start later this year and, once completed, the line will reduce western dependence on Gulf exporters and Russian pipelines. There is also the potential for the Constanta-Omisalj pipeline – which would have a capacity of 10 million tonnes of oil per year – to be extended to Trieste in Italy, and beyond.
Financing remains a problem, as construction is expected to cost around US$1 billion. However, the United States is reported to be a key supporter of the project, and Washington officials said recently they are prepared to provide $200,000 to fund a study into pipeline routes. Money is also expected from Interstate Oil and Gas Transport to Europe, INOGATE, a ten-country project funded by the EU and aimed at developing a pipeline network stretching from Central Asia to Europe. Balkan countries have enjoyed limited benefits from this project to date, despite their strategic position along the east-west corridor.
All countries along the pipeline hope that the project will inject new life into their shattered economies. The pipeline may also play a key role in building Balkan security, as the foreign investment it is expected to attract could strengthen stability and regional relations.