Serbia makes deal with Gazprom for extra 400 million cubic meters of gas this winter

Serbia has signed an agreement with Russia for additional gas supplies this winter despite efforts to diversify, Serbian media Danas reported on Oct. 10.

Dusan Bajatovic, CEO of the Serbian state-owned company Srbijagas, came to an agreement with Alexey Miller, CEO of Russian state-owned energy giant Gazprom, and expects Russian gas supplies to reach 400 million cubic meters this winter. Both parties met in St. Petersburg during the International Gas Forum.

Belgrade signed a three-year deal with Gazprom in May 2022, shortly after Russia’s full-scale invasion, and the gas deliveries will be under the same contract. Bajatovic said that Serbia will consider extending the deal in the first quarter of 2025.

Miller and Bajatovic also discussed the expansion of an underground gas storage facility in Banatski Dvor, northern Serbia, to 750 million cubic meters. The project is already underway and Serbia reached an agreement with Gazprom to use Russian technology on Oct. 8.

Serbia, which has maintained friendly relations with Moscow, is heavily reliant on Russian gas and consumes around 2.5 billion cubic meters of gas annually, of which Gazprom provides around 2 billion. Russian gas enters Serbia via the TurkStream and Balkan Stream pipelines, bypassing Ukraine which transits Russian gas to Central Europe.

Ukraine has said it will end its transit contract with Gazprom at the end of the year and many EU countries are already moving away from Russian gas imports, including Croatia and Slovenia. Hungary, which has also maintained ties with Russia, still imports Russian gas through Ukraine and also utilizes the TurkStream pipeline.

Belgrade has started looking at alternative options too after facing pressure from the EU. Despite its refusal to sanction Moscow, Serbia still wants to join the EU and toes the line between East and West.

Belgrade signed a contract with Baku in November, 2023 to deliver 400 million cubic meters of gas from 2024-2026 and a billion cubic meters from 2027. On Oct. 7, Belgrade and North Macedonia signed a memorandum of understanding for a 70-kilometer pipeline that will link Serbia to the liquefied natural gas (LNG) terminal in Alexandroupolis, Greece.

An agreement was also concluded with Romania for a gas interconnector on Aug. 6, which will have a bidirectional capacity of 1.6 billion cubic meters.

Gazprom becomes Russia’s least profitable company in 2023, Forbes reports

In the meantime, Gazprom’s net cash flow from operating activities increased by 5% to $242 billion in 2023.

The Kyiv IndependentKateryna Hodunova

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