Srbijagas CEO on company reconstruction, South Stream project and its profits

, News Serbia Energy

How the company “Srbijagas” will be reconstructed is not known yet and Managing Director of this Company, Dusan Bajatovic, said during signing the contract for changes and editions of spatial plan of the area for special purposes that company will give its reconstruction project version soon, that Serbian Government will discuss about this document and that this is not a threat. Reconstruction plan in our company is being worked on for two years already, and in the end Government decides about everything.

Otherwise, Minister of Energy Zorana Mihajlovic has recently said that Ministry of Energy got positive opinions about PC “Srbijagas” reconstruction plan, done by this Ministry, from other ministries in Serbian Government and she expects it to be adopted soon. As she said, PC “Srbijagas” has a loss bigger than a billion EUR which needs to be compensated and we should determine how we made these losses and enable company to function. She added that there is a clear will from the state to have efficient and more profitable company.

All conditions for construction of transnational pipeline “South Stream” i.e. pipes’ settlement to begin at the end of this year are achieved now- Dusan Bajatovic, Director of “Juzni tok Srbija”, said. With this document we have all required contracts that are leading to the beginning of construction of “South Stream” at the end of 2013. The track is completely defined including interconnections toward Croatia and Republika Srpska i.e. BiH and to issue more than 70 location licenses for different purposes at the same time. PC “Srbijagas” has delivered ideological project. General project will be delivered by 30 June and then tenders for equipment supply will be announced (pipes and compressor).

He stressed that South Stream need to issue construction license in autumn and he pointed that South Stream will enter Serbia through Zajecar and exit through Sombor near Backi Breg. The branch toward Croatia will be near Gospodjinci and branch toward Republika Srpska near Belgrade, both branches’ capacity will be 2 billion cubic meters each.

Acting Director for Spatial Planning, Dragan Duncic has pointed that Serbian Government had adopted spatial plan for South Stream last year and that conditions for edition of branches toward Croatia, Republika Srpska and BiH occurred in the beginning of 2013.

-This plan will enable PC “Srbijagas” to solve property legal question on 75 locations on track 600 km long and to carry approaching rods together with electricity cables- Duncic said.

Income and Switzerland

Bajatovic stressed that there are no contracts that are in charge of South Stream’s incomes at the moment. When he was asked if it is possible to come from transfer to off-shore zone, Bajatovic said that something like that can happen, but only with establisher’s approval.

Seat of the South Stream Company is in Zug in Switzerland, but all this company can do according to the contract without approval from Serbian side is that 250.000 EUR can be spent on annual level maximum- Bajatovic underlined. Income from South Stream will start to be achieved when state begin to charge taxes i.e. since 1 January 1016 when gas is planned to run through pipes. Achieved incomes from South Stream will be used in the first phase for paying credit back completely and stock holders will decide about income’s share in the second phase.