Serbia Aims For New Gas Projects

Serbian senior officials on October 1 announced new gas projects aimed at increasing the state’s energy security, and Russia will remain the key partner in the field.

They said that Serbia was a secure state energy-wise and that sufficient quantities of gas had been stocked ahead of winter.

Serbian Minister of Mining and Energy Aleksandar Antic said that Serbia was a completely stable and secure country in terms of energy, capable of providing sufficient fuel to the population and the economy.

Speaking at a conference titled Challenges of Energy Stability, in Belgrade, Antic said that Russia, which is currently Serbia’s sole gas supplier, would remain the key partner in gas supply.

The minister further said that “major gas projects” lay before Serbia and that the expansion of capacity of the only gas storage facility in Serbia, Banatski Dvor, will be discussed with Russian Gazprom in October. The facility is to be doubled, i.e. its capacity raised to one billion cubic meters of gas.

The minister added that the construction of a new gas storage facility was being considered and that a feasibility study was currently being prepared. “In those two storage facilities Serbia would have around two billion cubic meters of gas, which is level with Serbia’s annual consumption,” said Antic.

Antic also said that now was a good time for joint projects with the Russian partners, because the state has no debt to Gazprom for the previous heating season.

Dusan Bajatovic, the director of state gas supplier Srbijagas, also talked about new gas projects.

Bajatovic said that sufficient quantities of gas for the upcoming season had been secured and that the Banatski Dvor facility was nearly full. According to him, the start of facility expansion has already been agreed with the Russian partner, whereas the construction of a new one will be back on the table in early 2016.

Bajatovic added that both of those investments may cost up to 170 million euros, but in return Serbia would get facilities for the storage of two billion cubic meters of gas, which fully covers annual consumption. Out of that sum, roughly 65 million euros would be invested in the modernization of the Banatski Dvor facility.

In his words, Serbia, which is now receiving gas only from Russia, via Ukraine and Hungary, has also launched talks on gas supply from another direction, the north, but that Russian Gazprom is the only partner for the time being. He added that Serbia had not been invited into any gas pipeline projects in the region and that Russian gas is the only available one.

According to him, Serbia is expecting additional gas quantities from the north, as there will be new quantities from the North Stream 2 pipeline.

Bajatovic went on to say that South East Europe had no alternative in gas supply, because all the quantities from Azerbaijan have already been leased. Besides, there are no pipelines with a regional capacity from Croatia and Bulgaria, which could deliver gas to the region.

Bajatovic announced that the possibility of Serbia storing 100 to 200 million cubic meters of gas in Hungary in the event of problems with transport via Ukraine was being considered. Serbia has also initiated talks on cutting the cost of gas transport via Hungary, which is currently 44-47 dollars per 1,000 cubic meters.

Russian Ambassador to Serbia Alexander Chepurin said at the conference that Srbijagas was a reliable partner to Gazprom and added that he hoped for new joint projects.

“Russia needs a strong Serbia, as well as a strong Srbijagas standing tall,” said Chepurin. The ambassador also said that cooperation between Serbia and Russia in the gas sector was based on mutual benefit, specifying that Russia annually delivers 1.5 billion cubic meters of gas to Serbia.

According to him, in 2014 Gazprom delivered a total of 146 billion cubic meters of gas to Europe and that Europe’s gas consumption has gone up. Thus the Russian company is expected to deliver 160 billion cubic meters of the fuel to Europe in 2015.

Serbia uses about two billion cubic meters of gas a year and almost 80 percent of that amount is imported from Russia via Ukraine and Hungary, which is currently the only gas supply route for Serbia.