Serbia exclusive: South Stream impacts on Serbia, EU and Russia will find agreement says Srbijagas CEO, the report

10. December 2013. / News Serbia Energy

The Director- General of Srbijagas Dusan Bajatovic says there will be no new negotiations with Russia on the South Stream gas pipeline. There will be no new talks between Russia, Serbia and other countries participating in the South Stream project, the pipeline construction, because all the agreements were made ​​at the international level, and there will be no works’ delays and deadlines’ moving for the pipeline construction, stated Bajatovic.

Deputy Director General for the internal energy market in the European Commission Klaus Dieter Borhart said yesterday in Brussels, at a conference on South Stream, that bilateral agreements that the Russian Gazprom concluded with the countries involved in the South Stream project, including Serbia, were opposite to EU regulations, and that countries needed to re-negotiate about them.

All the South Stream agreements were made ​​at the international level, with nation-states, but not with the European Commission and these agreements are above the national legislation of the countries participating in the project, Bajatovic said, adding that all countries participating in the project – Germany, France, Italy, Hungary, Slovenia, Bulgaria, are EU members and they are aware of that.

He reiterated that because of this and the enormous political and economic importance of this project both for European countries and Russia, there would be no new negotiations on South Stream.

“So big are the interests of Europe and Russia that simply there are no way you cannot achieve an appropriate deal”, said Bajatovic.

I do not think that Serbia, as well as other participating countries of the South Stream, will have any problems due to the views of the European Commission for South Stream, because all countries in the negotiations provided their economic interest, Bajatovic said, adding that he did see reason why not keep what has been achieved in the negotiations.

South Stream is a development opportunity for Serbia and Bulgaria, Hungary and other countries of South East Europe, to Serbia that will not mean only the pipeline construction, but the presence of Russian capital and Russian investments in gas headquarters, chemical and processing industry, said Bajatovic.

“We have an interest to raise our economy, and if someone does not like that, and does not offer any alternative, I do not see how he thinks he can influence on these processes. Simply I think that it is for now a political issue, and we should not allow that some  political issue and blindly supporting to EU officials and what currently exists in their laws to be reflected on our interest “, said Bajatovic.

He pointed out that Serbia should stick to what is in our interest, and that is to build the South Stream, to be at full capacity, because with this project Serbia will be node transit country for gas and electricity, and chances to be the main country with a storage capacity of five billion cubic meters of gas per year are large.

As conformation that there would be no new negotiations, Bajatovic said that EU needed the raw materials and energy products, and if wanted to withstand the global economic game than it could rely principally at Russia, because nowadays of 20 to 25 percent of the European market has been supplied by Russian gas, and by 2035th it would amount 60 percent.

Nobody is going to lose a European future for some  position in some law“, he said, adding that, on the other hand, Russia has a huge interest in energy and raw materials export, because that export makes 52 percent of Russia’s budget revenues at this moment .

“That is why I am completely sure that, since there is such interest of both parties, the agreement between them will be reached “, especially as the main economic game now is not in Europe or in the United States, but spread to Asia, where also grows the gas consumption, which will be the 21 century’ fuel, said Bajatovic.

He pointed out that Europe, if wanted to remain competitive on a global level, it would have to resolve the issue of energy supply at reasonable prices.

Bajatovic said he did not see which would be the mechanism by which the European Commission might pressure member countries of the South Stream, and also Serbia, which was not an EU member.

He pointed out that the South Stream could be possible exemption from the application of the Third EU energy package, because the gas pipeline was not gas interconnection between several states, but it had to do with access to new gas sources from Russia and Central Asian countries.

South Stream is a new energy security and a new quality in the gas supply, because it bypasses Ukraine, which so far has made ​​problems, and this pipeline significantly increases both the quantity and access to new gas sources, said Bajatovic, adding that these are all conditions that the South stream is exemption from the rules of the Third energy Package.

He cited as an example the TAP pipeline, which also received an exemption, recalling that the pipeline’ owner  was “British Petroleum” and that the pipeline was stretching from Azerbaijan and the gas deposit “Sah Denis” in Turkey, through Greece and Albania to the south of Italy.

Bajatovic reminded that a contract of carriage for the South Stream in Serbia was signed, by which Gazprom in advance signed intent to lease 100 percent of the pipeline transport capacity, which meant that the pipeline would be operational and that its construction was economically justified.

All this, as he said, guarantees to the banks on the basis that it is possible to get money for its implementation, as the South Stream will not only be built, but will be in operation and will be cost-effective, and money will be returned.

He noted that the Nabucco gas pipeline project was not successful, mainly because there was no guarantee of a long-term lease of that pipeline because the project simply was not economically viable, which is not the case with South Stream.

Bajatovic pointed out that neither the strict European rules were applied on the North Stream that were looking now for South Stream, stating that it was because, when it came to the South Stream project, the huge interests were at stake.

He added that no alternative of the South Stream was offered to SEE countries and that Serbia was not invited or in another international project, except for the South Stream project.

“If our country has undeniable benefits of it, and someone does not want something to happen because of some political or ideological reasons, in any case that cannot be because of some economic reasons, then the question is – what is the alternative to this?” asked Bajatovic.

Source; Serbia Energy/Agencies/srbijagas

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