Serbia: Gov does not have money for a gas connection with Bulgaria

7. January 2015. / News Serbia Energy

For the “Trans Adriatic Pipeline”, to which Serbia should be connected instead of “South Stream” through the route Nis-Dimitrovgrad, nothing has been done so far. European Bank for Reconstruction and Development (EBRD) tries to help Serbia and Bulgaria to get new routes of gas supplies after Russia withdrew from the construction of the gas pipeline “South Stream”.

For that reason, Suma Chakrabarti, President of the European Bank for Reconstruction and Development has confirmed on this occasion, focusing on the construction of a gas pipeline between Serbia and Bulgaria, which until two weeks ago, when it suspended the project “South Stream”, was in the second plan.

– If South Stream will not be realized, the order of the other projects will be changed. If this happens, Serbian-Bulgarian project is high on the list – said Chakrabarti.

While Russia on the other hand categorically asserts that since continuation the construction of “South Stream”, by which the gas from Russia should be delivered under the Black Sea to Europe, there is nothing; the fact is that a ship for setting pipes in the sea is still in the Bulgarian port “Burgas”, which from Russia explain by the fact “that the ship must be somewhere” and there will be more events related with this project soon.

What, however, Serbia, which all its hopes put in the construction of “South Stream” and which now only through Ukraine and Hungary can does it , will do to get gas from other sources? What will happen if Russia stops the gas transit through Ukraine in 2017th, because then expires a contract on transit? These two years are short term for anything. Preparations for the construction of “South Stream” lasted eight years – and in the end nothing.

Nothing less is a problem of the fact that Serbia does not have the money to build the pipeline itself. Nor is it to be connected to the new Russian- Turkish pipeline on the border with Greece, nor to build Nis-Dimitrovgrad and connect to the Trans Adriatic Pipeline (TAP).

Vojislav Vuletic, President of the Gas Association of Serbia agrees that EBRD announcements to consider to help Serbia and Bulgaria to diversify the gas supply routes sound nice, but also adds that it has been waiting for that help for a long time, because EBRD insists to start with “Srbijagas” restructuring before that.

Serbia and Bulgaria signed an agreement to build two-way pipeline to connect the gas networks in March 2010th. In the construction of the interconnection pipeline 180 kilometers long should be invested between 100 and 120 MEUR, while Bulgaria has provided about 60 MEUR for the construction of its shares from EU grants. We did not get anything.

The project “Trans Adriatic Pipeline”, to which we should be linked via the route Nis-Dimitrovgrad, has been already a decade old, and its construction has not started yet.

If the announcement that the construction could start next year would be achieved, it would appeared the node for distribution of Azerbaijani gas from the Caspian region and with the Shah Deniz oil field, which would contribute to the diversification of gas supplies for industry and households.

Vuletic says that at this time Serbia has no choice but to intensify negotiations with the EU and to help building of gas pipeline Nis-Dimitrovgrad. The alternative is that “Gazprom” helps us and finances the construction of a gas pipeline from the Greek border to Serbia. The question is what would be economic calculation for Russia to do so, since it is uncertain how much gas would be transported at all through that way. About 50 billion cubic meters will be brought to the nodes on the border of Turkey and Greece, where interested European buyers will be able to buy it.

Vuletic recalls that he took part in the team that evaluated the justification of the construction of the gas pipeline Nis – Dimitrovgrad 20 years ago. And then it was questionable the economic viability of the project. Especially since it was clear then and it is clear now that the potential of this pipeline is around 1.8 billion cubic meters of gas, and that gas needs do not exceed 80 million cubic meters, since this pipeline would supply Dimitrovgrad, Pirot and Bela Palanka. Besides this would remain much excess capacity, and the construction is expensive.

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