Bulgaria, citing finances, said this week it is following through on threats to pull out of a long-planned oil pipeline from the Black Sea to Greece.

Bulgarian Finance Minister Simeon Djankov announced Wednesday the government of Prime Minister Boyko Borisov is dropping out of the Burgas-Alexandroupolis oil pipeline, which has been the target of persistent opposition from environmentalists fearful of a Black Sea oil spill.

The 175-miled pipeline, agreed to in 2007 by Russia, Greece and Bulgaria, is seen as a way for Russian crude oil supplies to bypass the crowded and narrow Bosporus Strait in Turkey to reach European markets via the Greek port of Alexandroupolis.

But Djankov has now said the Borisov Cabinet will send formal letters to Russia and Greece offering to terminate the agreement for the construction of the $1.5 billion pipeline -- effectively scrapping the project, the Sofia News Agency reported.

The center-right Borisov Cabinet has threatened before to pull out of the deal, which it inherited from the Socialist-led Sergei Stanishev government in 2009. Its attitude toward the project has been skeptical and deliberative, citing the environmental concerns of Bulgarian Black Sea cities Burgas, Pomorie and Sozopol in opposing it.

The Bulgarian Finance Ministry worked with Russian firms Transneft, Rosneft and Gazprom as well as with Greek participants Hellenic Petroleum and Thraki S.A. to form the Trans-Balkan Pipeline Co.

It was planned for an initial annual capacity of 35 million tons of crude oil, expandable to up to 50 million tons.

Bulgarian Energy Minister Traicho Traikov placed blame for the collapse of the deal on its Russian and Greek partners.

"Bulgaria's partners in the pipeline deal accused it of delaying the project quite a long time. But now it turns out it is not Bulgaria but the other countries, which are faulty and this is the reason why we decided to walk out of this agreement," he told the news agency. "It is not Bulgaria that should be criticized for failing to meet its commitments."

The Burgas-Alexandroupolis oil pipeline is one of the three projects aimed at bypassing the Bosporus Strait. Competitors include the AMBO trans-Balkan pipeline from Burgas via Macedonia to the Albanian Adriatic Sea port of Vlore as well as the Turkish-Italian Samsun-Ceyhan project.

Transneft, the state-owned Russian pipeline operator, Wednesday expressed dismay at Bulgaria's decision to drop the pipeline project, ITAR-Tass reported.

Company spokesman Igor Demin pointed out that Bulgaria's Environment Ministry had technically approved an environmental impact assessment submitted by Trans-Balkan Pipeline.

In the tourism-dependent southern Black Sea city of Burgas, however, Borisov's move to dump the pipeline project was greeted with overwhelming approval, the Bulgarian news agency reported.

"I thank Prime Minister Boyko Borisov and the government for placing the interests of the nation and the Burgas region above anything else," Burgas Mayor Dimitar Nikolov said. "I realize that their decision was not easy at all because of the enormous economic interests involved with the project."