The Government of Republika Srpska has allocated €48.5mn for the proposed Šepak–Novi Grad gas pipeline, making the project the dominant component of its revised public-investment programme for 2026.
The revised programme covers 12 priority projects worth approximately €64mn. The gas pipeline alone accounts for almost 76% of the approved envelope, underlining its strategic importance to the government’s energy and regional-development policy.
The project will be financed through the 2026 budget and developed in several phases over the coming years. Its purpose is to establish an additional primary gas-supply route across the northern and north-western parts of Republika Srpska, extending access to households and industrial consumers that currently have limited or no connection to the transmission system.
For industrial users, the economic case will depend on the pipeline’s eventual tariff structure, connection costs and the competitiveness of imported gas against electricity, coal, biomass and fuel oil. The route could support fuel switching in district heating, food processing, metals, manufacturing and other heat-intensive activities, but the benefits will not arise from construction of the trunk line alone. Municipal distribution networks, metering stations, pressure-reduction facilities and customer conversions will require further capital.
The investment also carries supply-security implications. An additional route can reduce dependence on a single entry point, but genuine diversification depends on where the gas is sourced and which upstream interconnections are available. A new domestic pipeline that continues to rely on the same external supplier improves physical resilience more than commercial diversification.
The initial €48.5mn allocation should consequently be viewed as part of a broader infrastructure envelope. Land acquisition, permitting, compressor and metering requirements, local distribution extensions and financing costs may increase the final system cost beyond the amount included in the 2026 programme.
The project could materially change the energy position of north-western Republika Srpska, particularly where industrial demand is concentrated enough to support network utilisation. Its financial durability will be determined by committed consumption volumes and connection density rather than the length of pipeline constructed.
