“Gazprom” loan for the South Stream construction will cost 4.25 billion euros, with a grace period until the investment would be completed and state guarantee from the budget of 5.9 percent. If the transit tax is now between 2.75 and three dollars per 1.000 cubic meters, Serbia could earn more than 200 million dollars annually only on this basis. All that earns, Serbia will give to “Gazprom” in the first time, with which are taken negotiations to be our guarantor also for the initial capital of the company “South Stream”. It is 270MEUR, and the rest is project financing.
Objective risk for the gas purchase from Russia, because of the conflict between Moscow and Kiev does not exist, but it is not only risk for Serbia, but also for the whole Europe. Serbia could survive a new gas crisis thanks to a sufficient gas supplies in depot Banatski Dvor, but also neither Serbia, and even the rest of Europe would have headache these days because of the conflict of two countries if there was a parallel access of gas supply by which would be circumvented Ukraine which could stop deliveries of Russian gas.
The first gas amounts, if all goes according to plan should flow through the South Stream by the end of next year. When this gas line would be at full capacity and the annual gas flow 63 billion cubic meters of gas, this means that 172 million cubic meters of blue fuel would be daily transported over Serbia. The current Europe consumption is 165 billion cubic meters, or 15 percent more than in 2012th.
If the transit tax is now between 2.75 and three dollars per 1.000 cubic meters, Serbia could earn more than 200 million dollars annually only on this basis. All that earns, Serbia will give to “Gazprom” in the first time, with which are taken negotiations to be our guarantor also for the initial capital of the company “South Stream”. It is 270MEUR, and the rest is project financing. The first investment of 75 MEUR was, as it turned out, too expensive for the budget of Serbia and Dusan Bajatovic, Director General of “Srbijagas ” sought help in Russian” Gazprom “, which, if finally agree, will pay complete initial capital, and “Gazprom Export” has generally taken on 100 percent of the risk for this work realization .
When asked why the state does not give guarantees to “Srbijagas” for “South Stream” anymore, Bajatovic explains ” that the Russian loan is less costly.
–When all put on paper it is clear that for state guarantee of 75 MEUR should be paid euro LIBOR plus interest rate of 5.9 percent, while the Russian borrowings would be with interest of 4.25 percent per year, with grace period until the beginning of the gas pipeline functioning, he says.
At remark of Energy Minister Zorana Mihajlovic, that we should ask Bajatovic who was informed about the negotiations details over financing of gas pipeline construction, and that she has no information that he included anyone from the government in these meetings, he says that it is true that he alone negotiated with “Gazprom” leaders in Sochi and in Moscow, but that president, first deputy prime minister and minister of finance have been informed on the details, and that nothing is working secretly.
On the question whether it is true that in the previous period has received 30 MEUR that supposed to be used as start-up capital, but that they do not know where the money went, Bajatovic says it is true that he had received the money.
–From 30 MEUR, 22MEUR was immediately used in firm recapitalization, and the other eight with the consent of the “Srbijagas” Assembly will be also used for the further recapitalization. Funds are earmarked and the Ministry of Finance is informed in every moment where the money is, categorically is the first man of “Srbijagas”.
Bajatovic explained that the Russians remained to resolve risk issues, before all, if the project was late; in that case the lessee in 100 percent of capacity, “Gazprom Export” will pay all credit expenses which “Srbijagas” takes for recapitalization project. The second is – what if “Srbijagas” completes a South Stream, and Hungary, or Slovenia does not, or if we can rely at 100 percent capacity lease, that in this case risk shall be taken by the Russian side.
Vojislav Vuletic, president of the Association for Serbia gas, says that the Russian side is convinced that the South Stream capacity through Serbia will be filled to maximum, and that the Serbian side will surely manage to return loaning of transit fee for seven, eight years.
When asked why is he so sure that capacity will not be half-empty, Vuletic confirms it by the fact that only last year was shipped about 15 percent more Russian gas to Europe, because Europe needs more and more gas especially when the nuclear plants are shutting down.
Source; Serbia Energy
