Serbia, American Liquefied Gas – Reality or Promise

, SEE Energy News

Sun, wind and LNG are not a realistic alternative to Russian gas and cannot replace more than 10 percent of domestic needs, says prof. Dr. Mitar Kovac, founder of the Eurasian Security Forum

At a time when Serbia is eagerly awaiting talks between two Presidents, Aleksandar Vučić and Vladimir Putin, on a new gas price for our country, which should be part of a long-term supply agreement, Christopher Hill, US Ambassador to Serbia, told Politika that the embassy has numerous projects for more efficient use of energy, so in exchange for Russian gas, it offers us wind, sun and natural liquefied gas (LNG).

“We want to ensure that Serbia has access to natural gas,” Hill said.

All that would be nice if this was something new that the American ambassador offers to our country, and if his predecessor Mary Warlick did not offer all the same, ten years ago when she was on duty in Serbia. From the promise to the realization, from then until now, there has been nothing, except that LNG has been in the center of attention due to the war in Ukraine and the US hope that Serbia will reduce its dependence on Russian gas and turn to overseas. If that is really so real and achievable, and the United States is so eager to help Serbia diversify its routes and sources of supply, why hasn’t that already happened? At least as a pilot project. Can anyone really believe that Serbia, which imports almost 90 percent of its gas, would have rejected this offer if its price had ever been lower than Russia’s, and that the United States has shown readiness to invest money in building a single LNG terminal.

– With the annual 1,000 billion cubic meters of gas exploitation, the United States is the world’s first producer and consumer. In second place is Russia with 700 billion cubic meters of gas production. As a world leader in technology, the United States offers liquid gas worldwide. However, as far as American or other liquefied gas is concerned, Serbia cannot get it directly, because we are a distinctly continental country. We must count on the use (and payment) of the services of neighboring maritime countries. Consumption of liquefied gas has jumped in recent years and this fuel has become competitive in price and more suitable for handling and consumption than gas from pipes. The share of liquefied gas exceeds 40 percent of consumption, and that is not the upper limit – says Srećko Đukić, former ambassador and expert on gas conditions in the EU.

For Serbia, liquefied gas means diversification of supply sources and reduction of 100% dependence on Russian gas. When Serbia starts investing in gas terminals, in gas pipelines that do not only transport Russian gas, it will feel the benefits and the current hopeless situation will not happen again. The “Balkan Stream” gas pipeline has only made Serbia even more dependent on Russia. Russian gas came unhindered through Hungary, but it seemed that it was not enough for us to be in Russia’s embrace. Thanks to the EU, the construction of a gas connection with Bulgaria began after many years. According to Djukic, our country did not have a policy of diversification or funds for those purposes.

– Serbia is facing a choice, whether it wants to remain dependent on Russia and Russian gas, with all the risks posed by such a decision, or intends to seek another way out. It depends only on us. The calculations that Europe cannot get rid of Russian gas in one foreseeable perspective of four or five years are wrong. Liquefied gas is coming to Europe from all over the world, and new terminals are being built rapidly in addition to the 27 existing ones. American liquefied gas intends to occupy a part of the Russian European gas market of 15-20 billion cubic meters, Israel 20 billion, Qatar 20-30 billion, Senegal, Niger, Algeria, Australia, Malaysia – Djukic notes.

Za razliku od njega, prof. dr Mitar Kovač, osnivač Evroazijskog bezbednosnog foruma, komentarišući navode aktuelnog ambasadora SAD naglašava da to što Amerika nudi brojne energetske projekte kojima bi se smanjila ili potpuno eliminisala energetska zavisnost od ruskog gasa znači ostvarenje američkih političkih i energetskih interesa. Sunce, vetar i LNG nisu realna alternativa i ne mogu da zamene više od 10 odsto naših potreba za ruskim gasom, kaže Kovač.

– The price of a little LNG that they would get would be incomparably higher than the price of Russian gas. In that way, Serbia would be doubly at a loss. We would give huge money for investments in energy projects, which give little in relation to needs. Insufficient Russian gas that Serbia needs would contribute to the collapse of the economy and would endanger the social minimum needs of the population. The construction of a gas connection to Bulgaria will not solve the problem because there is no natural gas that can reach Greek ports, gas pipelines or LNG terminals – our interlocutor is categorical.

In relation to other European countries, Serbia has retained a certain degree of sovereignty in making strategic decisions in political, security, economic and energy terms. That counts the United States, which opposes the small state of Serbia in the Balkans. Hence the suggestions of the American ambassador that Serbia must finally choose the East or the West, because there is no third way. And we need that third way of cooperation with the East and the West, avoiding any classification – concludes Kovac, Politika writes.