Serbia Demonstrates how the Natural Gas Market Needs Cohesion, Not Just Regulations

, News Serbia Energy
 “Golden Age of Gas” conference, which highlighted new and current developments in the energy sector, such as the growing trend for increased usage of natural gas in all areas of consumption. This eye-opening conference put our efforts into a bigger perspective as it showed how the global energy picture has dramatically changed in recent years.

According to the International Energy Agency projections, global usage of natural gas could increase 50% by 2035, and could satisfy more than 25% of energy needs. In order to achieve this, it is necessary to make another important step – to use the best possible technologies for exploitation of natural gas with the lowest possible negative influence on the environment.

When it comes to natural gas, the “Golden Age of Gas” is a door opener for Serbia. However, like the other countries from our region, Serbia still struggles with prices. By forming a common market and by putting in order relationships in the field of gas, the conditions for a higher level of competitiveness are being created to contribute to realistic price formation. Complete valorization of natural gas can be accomplished not only by using natural gas as an energy source, but also by contributing to the production of electricity.
Construction of gas power plants in the Republic of Serbia is becoming more evident. The Conference gave us a good overview of the current and available technologies and enabled businesses and strategic planners to exchange views and experiences, and to target potential possibilities.

The role of natural gas in the energy mix has been a regional question for a long time, dependent on conventional sources, as well as on present infrastructure. With technological developments, unconventional sources not only became more accessible, but also cheaper: gas has found its place.Gas usage is fast becoming one of the best options for many countries, especially when you consider that it is cleaner than coal or oil.

The Republic of Serbia has initiated numerous reforms of the energy sector. Now one of the most important goals is creating an energy market that will be integrated in the regional market, as well as in the European Union market.

Progress has been positive: the Energy Community Agreement has been signed, the second package of Energy Directives has been implemented, and the third package’s execution is ongoing.

It must be noted, however, that setting regulations is, in itself, not enough! They are only as efficient as the people who are tasked with implementing them. Everyone in the energy sector must come together to achieve a common goal. For the market to create further investment and develop new and improved technologies, the producers, supplies and consumers must act together in unison.

The Republic of Serbia has itself made significant steps. Bearing in mind that the country has only one direction of supply, and that domestic sources can satisfy only 20% of total domestic consumption, the following has been undertaken:

  • A new long-term contract for natural gas supply has been signed
  • First phase of construction of gas storage “Banatski dvor” has been completed
  • The company Juzni tok (South Stream) has been founded and will be the owner of all activities related to the realization of the South Stream gas pipeline through Serbia
  • Activities related to interconnection with Bulgaria have been initiated
  • Increased capacity of the current transport gas pipeline, as well as development of distribution gas pipelines, have continued
  • Other possible interconnection projects (Romania, Macedonia, Croatia, Bosnia & Herzegovina) are being developed

By signing the new long-term agreement, 5B m3 have been secured for the needs of Serbia. Since we know that the Republic of Serbia is currently spending more than 2B m3 of natural gas, it is clear that there is large potential for its use. The construction of the South Stream gas pipeline, as well as the interconnection with Bulgaria, offers the possibility of revitalizing the existing industry and developing new industrial and energy capacities.

The Republic of Serbia also possesses significant potential capacities for storage of natural gas. By developing new infrastructure, this storage may become important not only for Serbia’s supply security, but also for the supply security of the region.

Advisor of Serbia’s Minister of Energy, Ljubomir Aksentijevic