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    Russia grants Serbia "incredible" gas price

Summary

Russia has assured Serbia it will continue paying $270/'000 m3 for its gas for the next six months.

by: NGW

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Russia grants Serbia "incredible" gas price

Serbia will continue paying an "incredible" price of only $270/'000 m3 for Russian gas over the next six months, Serbian president Aleksandar Vucic said after meeting with his Russian counterpart Vladimir Putin in Sochi on November 25.

According to Radio Television of Serbia, Vucic said that Putin had "shown friendship towards Serbia," following a meeting where the renewal of Serbia's gas supply contract due to expire at the end of the year was discussed.

"We managed to get ... for the next six months a gas price of an incredible $270, so that our price does not change; we also got an increase in the amount of gas in those six months and we got flexibility [in monthly delivery], for which I especially begged Putin," Vucic said.

Fitch Ratings estimates that Gazprom will sell its gas on average for $295/'000 m3 in countries outside the former Soviet Union this year. European spot prices are much higher, with the TTF December contract currently trading at around €89/MWh, or $1,070/'000 m3.

Serbia gets all its gas from Russia save for a modest amount it produces domestically. Russia's TASS news agency recently reported that Vucic was seeking to secure 3bn m3/year of Russian supply over the next 10 years.

According to a meeting transcript published on the Kremlin's website, Putin told Vucic that the two sides would come to an agreement that was "acceptable to our Serbian friends." He said that Serbian prime minister Ana Brnabic was expected in Moscow for talks in December.