Serbia has no alternative for Russian gas

The gas interconnection between Bulgaria and Serbia, which the EU considers one of the priorities in resolving the problem of diversification and safety of gas supply, cannot be considered an alternative to the South Stream or Turkish Stream, i.e. an alternative to Russian gas – the Danas daily reports. The main problems are not only technically complicated and expensive construction of an international gas pipeline which is supposed to connect Serbia to the gas supply via Bulgaria, or the uncertainty about the price of gas (being cheaper than the Russian), but also the fact that there isn’t enough of Azeri gas that is supposed to be supplied via the gas interconnection between Bulgaria and Serbia.

Secretary General of the Gas Association of Serbia, Vojislav Vuletić says that the idea about construction of a gas interconnection with Bulgaria is not new and points out that the problems, because of which gas experts are sceptical about this project, are still not eliminated.

– Seven or eight years ago, the EU offered this same project to Serbia. However, back then, just like now, there have been many obstacles for its implementation. The first is a high construction cost. The EU is willing to completely fund the gas pipeline’s section in Bulgaria and, back in the day, it also offered us co-financing in the amount of 10%. This is a very little and definitely insufficient amount of money. Serbia alone cannot provide the funds for the implementation of this project which means that the country would have to take out loans which is certainly not a practical or desirable move knowing that our country is already too deep in debt. Serbia’s annual needs for gas are around 2.2 billion cubic metres, while the capacity of the interconnection with Bulgaria would be 1.8 billion cubic metres – Vuletić says.

He says that the pipeline’s capacity would not be enough to satisfy Serbia’s annual needs for gas and certainly could not be considered an alternative to the South Stream which, at its initial stage, could supply 5 billion cubic metres of gas for our country annually.

– The main problem is that Serbia would get the Azeri gas from Bulgaria via the TANAP and TAP gas pipelines. These pipelines are not being built because of Serbia’s need for gas and our country would not be a transit hub in transporting this gas to its end users. This gas is intended for companies and people in Italy and other EU countries. We would get is left over. Every single professional analysis has shown that the quantities of available Azeri gas are not sufficient to supply both the EU and Serbian gas consumers. Considering that we are not considered priority, i.e. that the international gas pipeline is not being built because of Serbia, it is clear that the quantities that we would get would be much lower than the quantities provided via the aforementioned interconnection. Bearing this mind, we cannot call this serious diversification – our interlocutor explains.

According to him, the gas interconnection between Bulgaria and Serbia could be considered important and thus profitable only if the European Union would completely fund the construction of the gas pipeline’s leg in Serbia. Vuletić goes on to say that the Qatari gas also cannot be considered an alternative to the Russian one.

– Qatar is a country with ample liquid petroleum gas deposits which would be transported to Greece via trucks. In order for us to be able to use this gas, we need to build transformer storage facilities in which the gas would be ‘transformed’ into the state that is suitable for pipeline delivery to end users. This means that we would first have to build such storage facilities, which we don’t have at the moment, and after that we would have to build the infrastructure for transporting gas. When you look at the Qatari and North African gas from this angle, you can see that they also cannot be considered alternative to Russian gas. Getting gas from Qatar or North Africa is a long way off because we simply don’t have transformer warehouses and the ancillary infrastructure – Vuletić points out.

He adds that Serbia also shouldn’t store gas abroad as plan B in the case of gas shortage.

– Serbia definitely doesn’t need something like that. We have a gas storage in Banatski Dvor which capacity is 400 million cubic metres of gas. This quantity is sufficient for three months. Storing gas in foreign countries, like Hungary, would be counterproductive not only because Serbia already has its storage, but also because of the high costs involved – Vuletić underlines.

The value of the Bulgarian gas interconnection, with the Serbian leg of the pipeline being 108km long, is 68 million EUR. According to the Serbian Energy Minister, Aleksandar Antić, the European Commission has been asked to provide 53 million EUR via its funds while Serbia would come up with the rest of the money. The TANAP and TAP gas pipelines, which would supply gas to Serbia via the Bulgarian interconnection, are supposed to be finished by 2018 which means that the delivery of the gas from Azerbaijan is supposed to start in 2019. The South Corridor gas route (TANAP and TAP) would run from Azerbaijan via Georgia and Turkey to Greece where it would be directed to Bulgaria and subsequently to Serbia.

(Danas/Ekapija, 14.07.2015)

This post is also available in: Italiano

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