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Serbia: The expansion of Serbia’s gas system agreed with Gazprom

17.Nov 2018.

Serbian Minister of Mining and Energy Aleksandar Antic said that following the meeting with CEO of Russian gas company Gazprom Alexey Miller on the sidelines of the International Economic Forum in St. Petersburg, a long-term cooperation in the expansion of Serbia’s natural gas transit network, including the construction of gas pipeline connecting the borders with Hungary and Bulgaria, has been agreed.

Minister Antic also said that he discussed a potential increase of natural gas exports to Serbia and the expansion of underground gas storage in Banatski Dvor, which is co-operated by Srbijagas and Gazprom. Last year, exports of Russian gas to Serbia increased by 21.2 % and this upward trend is expected to continue in the future. Also, in late 2017, Gazprom agreed to allow Serbia to reexport natural gas imported from Russia.

He said that the investment decision on both the expansion of gas transit system and underground gas storage is expected by the end of the year.

In early May, nine companies have submitted their offers at the public call for the lease of capacity of the new gas pipeline in Serbia, which will connect borders of Bulgaria and Hungary. Although the bids are non-binding, this is a good indication of the interest in the future gas pipeline.

The project is developed by Serbian company Gastrans, former South Stream Serbia, in which Russian Gazprom holds 51 % stake and state-owned Srbijagas the remaining 49 %. The offers were received from both domestic and companies for the neighboring countries. Market and cost analysis of the project should be completed by the end of June, as well as approvals from the neighboring countries. Serbia consumes about 2.5 billion cubic meters of gas per year and, on the basis of the bids received, additional 15 billion cubic meters would transit the country, which means that the pipeline should have a capacity of 42 million cubic meters per day. This is three times higher than current capacity of Serbia-Hungary interconnection, which is 13 million cubic meters of gas per day.

The current gas pipeline project envisages an entry point at the Serbian-Bulgarian border (location in the territory of Zajecar municipality) and four exit points: one near Paracin, one near Pancevo, one near Gospodjinci in Zabalj municipality and one on the Serbian-Hungarian border (location near Horgos in the territory of Kanjiza municipality). he commercial operation of the pipeline is expected to start on 1 October, 2019, but this date is subject to change.