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Serbia to invest 10 bn euros in energy sector within 8 yrs

July 12, 2013, 6:02 UTC+3

Serbia is ready to start building its section of the South Stream pipeline, Srbijagas Director-General Dusan Bajatovic said earlier

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BELGRADE, July 12 (Itar-Tass) - Serbia will invest 10 billion euros in the development of its energy sector in the next eight years, Prime Minister Ivica Dacic said.

Speaking at the conference “South Stream: The Evolution of a Pipeline” on Thursday, July 11, Dacic said three billion euros would be invested in the next three years in the oil sector, two billion euros in renewable energy projects and about two billion euros in the gas industry.

He stressed that “relations with Gazprom are of paramount importance” and noted particularly the construction of the Serbian section of the South Stream gas pipeline.

The construction of the South Stream pipeline and Banatski Dvor and Itebei gas storage facilities will make Serbia a serious player in the regional energy market.

The Banatski Dvor UGS facility was ceremonially put onstream on November 21, 2011. The UGS facility is one of the largest gas storages in Southeastern Europe. Its working gas capacity makes up 450 million cubic metres, peak deliverability - 5 million cubic meters per day.

Serbia is ready to start building its section of the South Stream pipeline, Srbijagas Director-General Dusan Bajatovic said earlier.

“All problems are solved” and all conditions are created for commencing work in late 2013, he said.

The 450 kilometre Serbian section will cost 1.7 billion euros and its construction is to start late this year.

The pipeline may produce the first profit in 2016 and the first payments to the national budget are due in the same year. Initially, they will be used to repay loans. Eventually, they will go to Srbijagas and Russian Gazprom, which are partners in construction of the pipeline in Serbia.

In November 2009, the joint project company South Stream Serbia AG was registered. Gazprom’s share in the joint venture is 51 percent, Srbijagas has 49 percent stake.

On March 27, 29013, Gazprom CEO Alexei Miller signed long-term contracts with the Serbian leadership on the supply of Russian gas to Serbia.

The South Stream Offshore Pipeline will run through the Black Sea from Russia to Bulgaria and have a total length of 930 kilometres. An EIA in accordance with national environmental legislation is being conducted in Russia, Turkey and Bulgaria. In addition, South Stream Transport is undertaking an Environmental and Social Impact Assessment (ESIA) in alignment with the standards and guidelines of international finance institutions. This will involve an ESIA Report for each Sector of the Project and a consolidated document for the entire South Stream Offshore Pipeline to ensure a consistent approach.

South Stream, which will be jointly built by Gazprom and ENI, will eventually take 30 billion cubic metres of Russian natural gas a year to southern Europe. Analysts have said that the project will cost around 10 billion euro, or 15.82 billion U.S. dollars.

South Stream is scheduled to become operational in 2013. The overall capacity of the marine section of the pipeline will be 63 billion cubic metres a year. Its cost is about 8.6 billion euro.

Supported by German, French and Italian investors and running across ten countries, the pipeline will supply 63 billion cubic metres of gas a year by 2020, meeting about 10 percent of Europe’s gas needs.

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