Russian Ally Serbia Mulls More Gas Links to Diversify Supply, Build Hub

Article content

(Bloomberg) — Serbia is considering building more gas links with nearby countries to reduce dependence on Russian flows and turn it into a regional transit hub.

Article content

The former Yugoslav republic is already building an interconnector with Bulgaria — due to be completed next year — which will enable imports from Central Asia and liquefied natural gas terminals on the Mediterranean. It’s now also looking at adding a link to North Macedonia and maybe Albania, the energy and mining minister said.

Article content

The nation is balancing a bid to join the European Union while refraining from embracing sanctions against its traditional ally Moscow. At the same time, the government is joining international efforts to diversify energy supplies from Russia, with whom it gets almost all its gas from.

“We don’t have enough of our own resources, at least when it comes to gas, but everything that can reduce dependence on Russia in the gas segment is important for us,” Energy and Mining Minister Dubravka Djedovic said in an interview. “We’re talking about hundreds of millions of euros” in projects to bring fuel from places like Azerbaijan and connect with terminals in Greece, she said.

Article content

An EU grant is paying for half of the 93 million-euro ($99 million) cost of building the interconnector with Bulgaria, and Serbia is looking for more support from the bloc for additional cross-border pipes that could turn it into an important transit route.

A link between Serbia and North Macedonia — estimated at 80 million euros — is at a preparation stage, said Djedovic, who joined the government in October. One to Albania depends on that country’s progress in developing a planned LNG terminal on its Adriatic coast.

“Once we enable the connections to streams that are coming from alternative sources, we will be less dependent on Russian” flows, she said, outlining plans for an eventual connection to the Trans-Adriatic Pipeline, which links to the Trans-Anatolian Natural Gas Pipeline.

Article content

Deep Ties

Still, Serbia’s deep ties with Russia’s Gazprom PJSC should continue, the minister said. Gazprom sells Serbia fuel through an extension of the TurkStream pipeline at below-market rates. Plus, a Gazprom unit co-owns Serbia’s Banatski Dvor gas-storage facility and its oil arm Gazprom Neft operates Serbia’s sole refiner, NIS.

In the oil market, an EU ban on Russian crude has disrupted deliveries to refiner NIS, whose only one viable supply route is through a pipe in Croatia. While the refiner has been processing mostly non-Russian oil since before the war in Ukraine, the government is still looking at adding more options, such as new links.