Thessaloniki-Skopje Crude oil Pipeline project

complete

Construction of a crude oil pipeline from Hellenic Petroleum’s facilities at Thessaloniki to the Okta refinery at Skopje capable of carrying 2.5 million tons of crude oil per annum, reducing transportation costs and providing security of supply to the region. The project will encourage links between the oil sector and the rest of the economy through the expansion of the market. The Bank has also engaged in a policy dialogue with the government of FYR Macedonia concerning long-term sector liberalisation. The project will also contribute to regional integration, as the growth of HP’s operations will allow the company to supply neighbouring countries. Hellenic Petroleum (HP) is the main sponsor of the project and the largest oil company in Greece. It is pursuing a regional expansion based on its strengths in refining and marketing. HP has the most modern refineries in the region representing 50 per cent of Greek refining capacity and supplying 57 per cent of the Greek crude oil market. The proposed borrower is a subsidiary of HP. A loan of up to US$ 50 million (€59 million). Of this amount, up to US$ 25 million (€29 million) is intended to be syndicated to commercial banks. The total project cost is US$ 105 million (€123 million). The project has been screened A/0, requiring a full Environmental Impact Assessment (EIA). This was carried out by independent consultants in accordance with EU/Greek, FYR Macedonian and EBRD requirements. While the construction of the pipeline will involve a range of environmental issues, it will reduce transport costs by more than 40 per cent and, on the basis of a risk assessment, significantly reduce the risk of a major hazard accident from the existing rail transportation. Representatives of the EBRD, along with environmental consultants, inspected the full length of the proposed pipeline route. As a result of the environmental and technical studies, the pipeline has now been re-routed to take account of all sensitive environmental and ecological issues. In particular, the pipeline is no longer routed alongside the Vardar and its nearby riparian (wetland wildlife) ecosystems, with the majority of the route now passing through agricultural land of limited ecological importance. A detailed environmental management plan, including an emergency response plan, has been developed to ensure that any unforeseen or unidentified impact is minimised. Public consultation issues are also being addressed as part of the EIA process and in line with the Bank's Public Information Policy. There is an Environmental and Social Impact Assessment available for this project. None.