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Engineering surveys for the South Stream project start in Serbia

August 30, 2012, 20:24 UTC+3
The South Stream project is not the only area of cooperation between Russia and Serbia
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MOSCOW, August 30 (Itar-Tass) — Gazprom’s chief Alexei Miller and Dusan Bogdanovic, the general director of the Srbijagaz enterprises, met in Moscow on Thursday to discuss Russian-Serbian energy cooperation.

The sides discussed a plan of joint actions to implement the South Stream project in the territory of Serbia. Under an agreement between a joint engineering company and the Srbijagaz consortium, Giprospetsgaz, one of the oldest Russian design and engineering institutes, has started a series of engineering surveys in Serbia. Besides, basic data and materials for drawing up a graphical plan have been handed over to a territorial planning agency.

Gazprom supplied 1.4 cubic meters of gas to Serbia in 2011. The state-owned enterprise Srbijagaz is in charge of transportation, distribution and storage of gas in Serbia.

In a bid to diversify gas export routes, the Russian gas monopoly Gazprom is building a gas pipeline running via the Black Sea to the countries of southern and northern Europe under the South Stream project. Gazprom has signed inter-governmental agreements with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria to implement the inland part of the South Stream project.

Russia and Serbia signed a comprehensive inter-governmental agreement for the South Stream project and the Banatski Dvor gas storage.

In November 2009, a joint engineering company, South Stream Serbia AG, was registered in November 2009. Gazprom and Srbijagaz holds a 51% and 49% stakes in the joint venture, respectively.

Giprospetsgaz is one of the oldest Russian design and engineering institutes founded in 1938. Some of its main activities are design of major pipelines, infrastructure facilities of oil and gas offshore fields, compressor stations, gas pipelines and gas pipeline infrastructure, pumping and refrigerating stations, gas distribution stations, underground gas storage facilities, power transmission lines, systems of communication for gas filling and fuel stations and technical service centers at oil depots, industrial gas supply systems.

The South Stream project is not the only area of cooperation between Russia and Serbia.

Serbia is planning to offer Russia to become a strategic partner of the Zelezara Smederevo steel plant.

“Russia will become the first state to be offered to become a strategic partner of the Zelezara Smederovo steelworks. We expect the first results soon,” Serbian Minister of Finance and Economy Mladjan Dinkic said during his visit to the Serbian town of Valjevo on August 22.

He said that a Serbian delegation led by President Tomislav Nikolic and Prime Minister Ivica Dacic would soon pay a visit to Russia to discuss bilateral economic cooperation, including the Smederevo steel plant.

The minister explained that Serbia didn’t have its own coke and iron ore which meant that it could conduct a search for strategic partners exclusively among foreign companies. Other potential partners for strategic partnership include Ukraine, China and India. However, Dinkic said he was sure that an agreement would be reached with Russia with which it’s necessary to develop bilateral cooperation.

Dinkic said Serbia had to spend 120 million euros annually to keep the plant afloat. It incurs 170 million euros worth of losses if it begins full-scale operation. A strategic partner could help Zelezara Smederevo to keep 5,300 jobs and start making profit which is vitally important for Serbia.

Zelezara Smederevo suspended its operation until September 1. Early this year, the US Steel Company, which used to own Zelezara Smederevo, sold it to the Serbian government at a symbolic price of one dollar. Since then the Serbian authorities have been looking for a new owner who could reanimate the production.

In the meantime, Russia is also ready to grant additional loans to Serbia for the development of the country’s railway network, particularly for completing the renovation of the Belgrade-Pancevo railway.

 

 

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