NATO Finalizes €27 Billion Deal to Overhaul Military Fuel Transport System

BRUSSELS — NATO countries finalized a €27 billion deal to overhaul the alliance’s military fuel transport system, the organization announced Wednesday.

“The 27-billion-euro investment will modernise NATO’s existing fuel storage and distribution infrastructure,” the alliance said in a statement. “It will support new facilities, including pipelines, in the eastern and south-eastern part of the Alliance and ensure NATO forces have the energy supplies they need for warfighting readiness.”

NATO’s 32 ambassadors signed off on the deal, part of its effort to prepare for a potential war with Russia, during their last regular meeting ahead of the summer break, two NATO diplomats said, after Turkey dropped its last-minute bid to hold up the compromise. Both diplomats were granted anonymity to speak freely about the classified talks.

The military alliance also agreed to raise its common funding budget to “up to EUR 6.5 billion” for next year, and signed off on its investment priorities for the next five years. For 2026, allies had agreed on a budget of €5.3 billion.

Countries have held negotiations for months on the revamp of the alliance’s 10,000-kilometer Cold War-era pipeline network, which is designed to connect NATO’s existing system in Western Europe to newer alliance member countries in the east and north.

The project, touted as NATO’s largest-ever and most expensive commonly funded scheme, could take up to 30 years to complete and covers dozens of projects, ranging from pipeline upgrades to energy storage sites.

“A stronger NATO is in the pipeline,” said one of the diplomats.

NATO countries had previously disagreed over the high costs of the agreement, while some fretted that it would lock in fuel projects for decades, although they later dropped their objections.

At this month’s leaders’ gathering in Ankara, NATO Secretary-General Mark Rutte praised the political deal reached by allies on the revamp. The “historic step” on the revamp “will modernize our existing fuel storage and distribution infrastructure,” he told reporters.

Despite allies agreeing on the broad contours of the deal ahead of the summit, Turkey mounted a last-minute effort to resist an agreement after the gathering as it sought to get funding fast-tracked for its own projects.

In the end, Rutte’s intense push for a deal, combined with NATO’s top commander, U.S. Gen. Alexus Gregory Grynkewich, instructing allies that the deal was necessary, likely contributed to countries including Turkey giving it the green light, one of the diplomats said.

Turkey's permanent representation to NATO didn't immediately respond to a request for comment by POLITICO.