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    Kremlin 'Pledge' To Serbia Welcomed


Russia’s reported decision to scrap a destination clause in gas sales to Serbia has been welcomed.

by: Mark Smedley

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Natural Gas & LNG News, Europe, Corporate, Litigation, Political, Regulation, Balkans/SEE Focus, Russia, Serbia, Slovenia, Turkey

Kremlin 'Pledge' To Serbia Welcomed

Russia’s reported decision to follow European Union practice and scrap a destination clause in gas sales to Serbia has been welcomed by a leading monitor of the latter's energy relations.

Serbia's president Aleksandar Vucic met his Russian counterpart Vladimir Putin and other key officials in Moscow December 19, during which Serbian support for the Gazprom-backed TurkStream project was discussed. But it appears that Serbia wanted changes to an existing contract too.

The Energy Community (EC), which aims to align non-EU states to the EU energy market, in a December 20 statement citing press reports, said the presidents of Serbia and Russia had agreed to exclude a destination clause from the 2012 intergovernmental agreement (IGA) on gas supplies. The EC had previously challenged the destination clause as non-compliant with EU competition law. Serbia is a non-EU member of the Energy Community, which notes that the 2012 inter-governmental agreement is implemented through a contract between Gazprom, Srbijagas and Yugorosgaz.

EC director Janez Kopac said: “We congratulate the Serbian authorities, and minister [Aleksandar] Antic in particular, and encourage both sides to finalise the relevant amendments to the IGA as soon as possible. This opens the possibility for Serbia and also for neighbouring Bosnia and Herzegovina to establish a more liquid gas market. I am happy to see a constructive approach of the Russian Federation towards the Energy Community acquis [package of EU laws and normative acts] and believe this opens a new era of co-operation based on the rule of law.”

Russian gas sales to Serbia have increased, just as they have to the rest of Europe.

Tass, the Russian news agency citing the Kremlin, reported December 19 that Gazprom sales to Serbia to date this year are up 26% at over 2bn m3, and are forecast to increase by a further 15% in 2018.

German broadcaster Deutsche Welle has pointed to a balance of Serbia’s relations between east and west, as Serbia seeks to buy more Russian military equipment, and Russia hopes to bind Serbia to TurkStream – noting that Gazprom CEO Alexei Miller was in Belgrade for talks on the project late November. Gazprom plans to start initial flows of gas via its 31.5bn m³/yr capacity TurkStream  by end-2019.  Official comments on the gas aspects of both presidents’ talks in Moscow, meanwhile, have been scant from either the Kremlin or Belgrade.

In a separate announcement December 20, the European Bank for Reconstruction and Development (EBRD), European Investment Bank, European Union, and World Bank  have said they are providing a €270mn package to finance a permanent interconnection between the electrical networks of Moldova and Romania, which they said would strengthen Moldava's energy security.