Bulgaria agreed to repay its 4.88 million euro debt for the Burgas-Alexandroupolis oil pipeline construction, Transneft Vice President Mikhail Barkov, who participated in recent negotiations in Sofia, said on Monday.

"We have reached an agreement to repay the 4.88 million euro debt. The Bulgarian party has recognized the debt and is ready to repay it," Barkov told RIA Novosti.

Russia, Greece and Bulgaria signed in 2007 an agreement to build a 300-kilometre pipeline from Burgas on the Bulgarian Black Sea coast to Alexandroupolis on the Greek Aegean Sea coast. The capacity of the pipeline is 35 million tons and it may be extended to 50 million tons.

"The Bulgarian partners continue to consider the project as far as profit and ecological risks are concerned, but we believe they understand that it is not reasonable to abandon the project," Barkov said

In June 2010, Bulgarian Prime Minister Boyko Borisov decided that Bulgaria would not participate in the project. Later he said that the Bulgarian government had not made a final decision. His latest statement was that Bulgaria would abandon the project due to its environmental impact.

According to a source familiar with the situation, Bulgaria's debt is divided into corporate debt and debt to shareholders. According to the latest agreements, Bulgaria will first repay the corporate debt because its nonpayment may have a negative impact on the managing company's work. The debt to shareholders will be repaid in allotments with a full repayment happening next year.

Barkov said that another important decision made at the meeting was to present the project's financial model in Moscow at the beginning of August.

MOSCOW, July 26 (RIA Novosti)