Serbia: South Stream construction delayed start triggers gas supply reduction from Russia

Published on 11. November 2014., News Serbia Energy

Disappointed expectations of the Russian president were initial cap, who thought he would mark the start of the South Stream pipeline construction in Belgrade.

At this moment starting issues of Serbian debt and reduction of gas supplies by 28 percent are more connected with the political rather than the economic interests of Russia. The consequences of delaying the start of South Stream construction, and thus tacit support for the European attitude towards Russia in terms of the pipeline, are the reasons for the reduction of gas supplies and Russian request that debt for previously delivered quantities of this fuel definitely should be repaid.

Namely, Serbian debts for gas have been tolerated for decades so the moment at which this question has been initiated is debatable and indicates that there is a critical point in the relations between our countries and Russia, that is between us and the EU.

The decision during this week

Serbian delegation should met already this week in Moscow in order to find a compromise solution, both political and energy, and since the protocol signing depends on further supply our country with this fuel.

– The initial cap for the deterioration in relations between Moscow and Belgrade were disappointed expectations of the Russian president, who officially supposed to announce the beginning of South Stream construction in Belgrade, as it was previously indicated – claims source of Kurir from the Ministry of Foreign Affairs (MFA) and adds that it was one of the main reasons of arrival of Russian President Putin.

– However, the Serbian side gave up on that in the last minute due to pressure from the EU, which Moscow interpreted as a betrayal and clearly Serbia’s placing on the side of the Union. In addition, the problem of “Gazprom”, what its leader Alexei Miller made clear to Serbian partners, is the “Srbijagas” reorganization which must be completed by March 2015^th, and not only the legal but also the ownership unbundling of production and supply of gas transport should be the next. Ownership unbundling does not correspond to “Gazprom” because it loses its monopoly than. And it’s kind of additional pressure to preserve the position of “Jugorosgas”, which is a daughter company of “Gazprom” – says our interlocutor.

Legal consequences

He adds that the problem also is that the Serbian officials asked for clarification of the legal consequences if the South Stream construction would be canceled.

– Serbian side has only hinted that in that case it would suffer great economic loss and that it should come to the correction of certain parts of the Energy Agreement, in which NIS also has been included. This further infuriated the Russians – source tells for Kurir.