Serbia says it will buy more gas under new agreement with Russia

The CEO of the Serbian state-owned company Srbijagaz, Dušan Bajatović, said that the new gas agreement with Russia has been agreed in essence, but some details related to the risks for both countries needed to be discussed.

He said that Serbia will buy 2.5 billion cubic meters of gas per year, instead of 2 billion, and that the next contract will be signed for 10 years.

After official talks between Serbian President Aleksandar Vučić and his Russian counterpart Vladimir Putin in Moscow, the Srbijagaz and Gazprom teams continued talks to fine-tune the new gas agreement, Bajatović explained. Vučić was in Moscow on the occasion of the 9 May parade celebrating Victory Day in World War II.

“The existing agreement expires in May. Now we are also discussing mutual risks. The problem is not the amount of gas, but rather the flexibility, because Serbia has started consuming 18 million cubic meters per day on cold days. We will see how much this will cost,” he pointed out.

He added that the problem with flexibility was related to the bigger needs during cold days.

“Everyone would take much more. The Hungarians take 22 million cubic meters every day and will buy in the coming years. There is also Slovakia; we must help our colleagues to have the appropriate quantities,” said Bajatović.

The CEO of Srbijagaz said that Serbia was aiming for a ten-year contract with Russia and that he believes that its implementation is possible.

“They agree, but there is one very important question. Europe wants to ban Russian gas in 2027, but there may be some agreement between the Russians and the Americans. The question arises of what is the compelling force of our contract if we sign it for 10 years, for us and for the Russian side. So that they do not suffer sanctions because they cannot supply us, and we suffer sanctions because we cannot take it,” Bajatović noted.

On 6 May, the European Commission announced a comprehensive plan to phase out all imports of Russian gas and oil by the end of 2027, a landmark move to sever energy ties with Moscow in response to Russia’s 2022 invasion of Ukraine.

EU to end all Russian gas and oil imports by 2027, signals robust energy sanctions

The Banatski Dvor storage facility is currently 76% full, and one million are currently being injected for technical reasons because there are other operations related to the pressure in the reservoir.

“The most important thing is that we have actually started the official expansion of Banatski Dvor,” he said, indicating that the first borehole has been drilled.

Serbia has officially started the expansion of its Banatski Dvor storage facility, expected to double its capacity. The project is being implemented by Srbijagas and Russia’s Gazprom. The project is expected to be finished by the end of 2026.

Serbia receives Russian gas via the TurkStream pipeline running via Bulgaria, where it is called Balkan Stream. After Russia started its full-scale invasion of Ukraine, Bulgaria stopped buying gas from Russia, but continues to transit gas under agreements with Gazprom concluded prior to the invasion.”

Edited by g.g.

File photo: Bulgarian President Rumen Radev (R) and President of the Republic of Serbia Aleksandar Vucic (L) during the specialized construction activities of the gas interconnection ‘Bulgaria and Serbia’ (IBS) in the village of Goletovtsi, Bulgaria, 1 February 2023. [EPA-EFE/VASSIL DONEV]