Serbia, Bulgaria to Work on Gas Interconnection

Serbia and Bulgaria have signed an agreement on the construction of a gas interconnection, and the Serbian Government hopes the European Union will help with the construction of this pipeline which is important for increasing the region’s energy security.

The agreement on the construction of the gas interconnection, which should connect the Serbian city of Niš and the Bulgarian town of Dimitrovgrad, was signed earlier this month in Belgrade. After signing the agreement, officials from the two countries said that they were expecting the gas pipeline to be built by 2018 and for gas to start flowing through it in 2019.

Serbian Minister of Mining and Energy Aleksandar Antić said that the two-directional gas pipeline should have a length of 150 kilometres and an annual capacity of 1.8 billion cubic metres of gas. The minister added that 60 percent of the gas pipeline would be in the territory of Serbia and that Bulgaria would support Belgrade in efforts to secure financing for the construction of the Serbian part of the project from EU funds. Bulgaria with EU assistance has already secured financing for its part of the gas pipeline.

Asked by journalists which gas Serbia would be supplied with via the interconnection with Bulgaria, Antić said that the point of constructing gas interconnections was to allow diversification of gas supplies.

“Serbia is fully open to all projects that can bring gas to this part of the Balkans. We are not a country on which the construction of Turkish Stream depends, this is a matter which, at this stage, primarily depends on Russia and Turkey”, said Antić.

According to him, the gas interconnection with Bulgaria will also give Serbia the possibility of receiving certain quantities of the gas flowing through the Trans-Adriatic Gas Pipeline (TAP) and the Trans-Anatolian Gas Pipeline (TANAP), but also the liquefied natural gas (LNG) terminal in Alexandroupolis, which will be connected to TAP.

“If needed, the two-directional interconnection will allow us access to gas supplies from Azerbaijan, Turkmenistan and Iran, or gas from Algeria or Qatar via the terminal in Alexandroupolis,” said Antić.

Following the signing of the Serbia-Bulgaria agreement, European Commission Vice-President for the Energy Union Maroš Šefčović said on June 10 that the gas interconnection project was one of the European Union’s priorities and that Brussels would consider giving financial support to the project.

During his visit to Serbia, Šefčović said that a working group had been formed that should facilitate the greater integration of the countries of the Western Balkans into the European gas network and guarantee them access to at least three different sources of gas.

“If the gas supply interconnection is built, we want to guarantee that the whole region will have access to at least three different sources of gas, because we want to overcome certain countries’ over reliance on one source,” said Šefčović.

Serbian Prime Minister Aleksandar Vučić confirmed that the European Union has backed the construction of the gas interconnection between Serbia and Bulgaria, and added that Serbia was expecting the EU to finance the construction with 50 million euros, while Serbia would give about 15 million euros.

“For us, the matter of gas supply is extremely important, especially from 2019 (when Russia will stop gas deliveries via Ukraine). The European Commission will continue working with Serbia on ensuring energy security for our economy and citizens,” Vučić said after meeting with Šefčović on June 10.

But, according to Russian sources, seemingly Serbia has continued negotiations with Russian gas giant Gazprom about participating in the Turkish Stream project, which would see gas from Russia arrive in the Western Balkans and Central Europe via Turkey and Greece.

Deputy Chairman of Gazprom Alexander Medvedev said on June 9 that Gazprom was “negotiating with Serbia about the Turkish Stream gas pipeline”, but did not go into the details of those negotiations. Gazprom CEO Alexei Miller was in Belgrade on May 28.

Medvedev also added that according to preliminary estimates, TurkishStream will cost about 3.3 billion euros, and that a commercial contract with the Turkish company Botas on gas supplies would be signed by the end of June.

Medvedev said that Europe may face a 80-billion-cubic-metre gas shortage in 2025, and that “the dreamers in Washington would find it difficult” to supply Europe with more than 50 billion cubic metres of gas annually.

However, Šefčović said that the only information the European Commission had about Turkish Stream was from the media for now.

“The European Commission has not received an explanation as to why the gas supply via Ukraine using a gas system that has reliably supplied Central and Eastern Europe for decades needs to be terminated,” he said, adding that he did not see economic justification for terminating Russia gas supplies via that gas pipeline.

After Russia announced that it would stop gas supplies via Ukraine in 2019, Serbian officials began searching for new sources and gas supply routes. Serbia needs about two billion cubic meters of gas annually, of which only 20 percent is domestically produced. The rest is imported from Russia, via Ukraine and Hungary.

However, despite the government’s wish to find new gas supply routes, experts believe that Serbia currently has no adequate replacement for Russian gas.