Serbia, Why does the state store gas in Hungary at an unknown price?

, SEE Energy News

Regardless of the fact that the agreement reached on pumping 500 million cubic meters of gas into underground storage facilities in Hungary gives some security to consumers in Serbia before the winter season, it would be far more economically viable for our country to have more storage space on its territory.

Also, the statement of Sinisa Mali, Minister of Finance, that the agreement reached with Budapest is “great news for the citizens of Serbia”, experts take with a grain of salt because the most important thing about this arrangement has not been announced, and that is how much the Serbian side will pay for storage.

Energy expert Goran Radosavljevic told Danas that the main question to be asked in this particular case is why Serbia has not yet expanded the capacity of its only underground gas storage facility in Banatski Dvor, as well as built additional storage facilities.

– It was announced that it would be implemented, but it still did not happen, and that is why Serbia now, instead of using its own, has to rent other people’s storage capacities – Radosavljevic explains.

According to him, regardless of the fact that the service of natural gas storage in Hungary will cost Serbia, it is good that, in the absence of its own storage capacities, at least that option is provided.

– In other words, the lease of storage space in Hungary will enable the formation of reserves of gas purchased in the period before the start of the winter season. It is a much cheaper option than buying gas at the moment when the season starts, because then its prices are much higher. The lease of the underground storage in Hungary will thus save Serbia, because it will use gas from reserves bought at a cheaper price than the winter one. However, that does not change the fact that it would be much safer and economically more favorable for Serbia to have enough storage space on its territory, and therefore in the coming period we should work on expanding the existing and building new ones – says Radosavljevic and adds that the arrangement with Hungary should be transparent, ie that the authorities inform the public how much the gas storage service in that country will cost Serbia.

Energy expert Milos Zdravkovic told Danas that after reaching an agreement on storing its gas in Hungary, Serbia is more carefree about the winter season, but he also thinks that it would be far better if our country has enough of its own storage capacities.

– The agreement with Hungary is a good move. At the annual level, Serbia needs about three billion cubic meters of gas. At the moment, we have about 162 million cubic meters of gas in the Serbian part of the “Banatski dvor”, and we have the right to buy from the Russian part. With 500 million cubic meters in warehouses in Hungary, we will have significant gas reserves. Of course, it would be better for Serbia to have enough underground warehouses on its territory. Accordingly, we must work on the expansion of the “Banat Palace” – says our interlocutor.

Economist Milan R. Kovacevic emphasizes that it has not been disclosed how much Serbia will have to pay for gas storage in Hungary, nor at what price it will pay for “blue energy” that it will buy for those purposes.

– So far, those data have not been made public, which would show whether this arrangement is favorable for Serbia. What is evident is that a big mistake was made when the majority ownership over the Banatski Dvor warehouse was given to the Russian company Gazprom, as well as the fact that the expansion of storage capacities in our country was not done in time. The epilogue of that is that Serbia is now paying Hungary for that service – our interlocutor states.

As a reminder, the authorities in Serbia have announced the expansion of the underground warehouse “Banatski dvor” in the last few years and that it could be financed from the “Investment Program Serbia 2025”, but did not come up with estimates of how much the project would cost, Danas writes.

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