South Stream Begins in Serbia

November 24, 2013: Serbia  hosted  the ceremony of welding the first joint of the Serbian section of the South Stream gas pipeline. The ceremony took place in the vicinity of Sajkas village, South Backa District.

Taking part in the event via video link from the Palace of Serbia in Belgrade were Alexey Miller Chairman of the Gazprom Management Committee, Tomislav Nikolic, President of the Republic of Serbia, Ivica Dacic, Prime Minister of the Republic of Serbia, Alexander Novak, Russian Minister of Energy and Dusan Bajatovic, Director General of Srbijagas.

“Right after Bulgaria we started building South Stream in Serbia. The project is strategically important for the entire Europe. The new trans-European gas transmission system will eliminate the pressing problem of transit risks and secure uninterrupted Russian gas supplies to dozens of thousands of European consumers. South Stream will adjust the European energy map for the better, becoming an integral part of the EU’s energy security system.

The gas pipeline construction in Serbia will add considerable momentum to the development of the whole gas transmission system, turning the country into a large gas transit and storage center of the European significance. South Stream will boost integration and economic processes in the region, attracting over EUR 1.5 billion of direct investments to Serbia and creating more than 2.5 thousand jobs for the construction period.

Hungary is next in turn for the South Stream construction to begin,” said Alexey Miller.

In the presence of Tomislav Nikolic and Alexander Novak, Alexey Miller and Dusan Bajatovic signed the Agreement for gas transportation via the South Stream gas pipeline across Serbia.

In full conformity with the European legal requirements as well as the Russian-Serbian Intergovernmental Agreement of 2008, the parties also signed the Agreement on the public service obligations of the project company in Serbia.

The Palace of Serbia hosted today a working meeting between Alexey Miller and Milorad Dodik, President of the Republika Srpska entity of Bosnia and Herzegovina. The parties discussed the progress with the preparation of an intergovernmental agreement between the Russian Federation and Bosnia and Herzegovina regarding cooperation in the natural gas and power generation sectors.

Background

The South Stream gas pipeline is Gazprom’s global infrastructure project aimed at constructing a gas pipeline with a capacity of 63 billion cubic meters across the Black Sea to Southern and Central Europe for the purpose of diversifying the natural gas export routes and eliminating transit risks.

South Stream’s offshore section will run under the Black Sea from the Russkaya compressor station on the Russian coast to the Bulgarian coast. The total length of the Black Sea section will exceed 900 kilometers and its maximum depth will be more than two kilometers. The onshore section in Europe will be 1,455 kilometers long.

The onshore section will cross Bulgaria, Serbia, Hungary and Slovenia. The gas pipeline will end at the Tarvisio gas metering station in Italy. Gas branches from the main pipeline route will be built to Croatia and to Republika Srpska (the state formation within Bosnia and Herzegovina).

In November 2012 the South Stream project entered its investment stage. In December 2012 the South Stream construction started near Anapa in the Krasnodar Territory. On October 31, 2013 the ceremony of welding the first joint of South Stream’s Bulgarian section took place near the Rasovo CS site.

South Stream will run in Serbia from Zajecar at the border of Serbia and Bulgaria to Backi Breg that borders Hungary. The length of the Serbian section will be 422 kilometers. Gas branches from the main pipeline will be laid to Croatia (51 kilometers) and Republika Srpska (109 kilometers).

Set up in November 2009 by Gazprom (a 51 per cent stake) and Srbijagas (a 49 per cent stake), South Stream Serbia AG joint project company is responsible for the construction and subsequent operation of South Stream in Serbia.

In October 2012 the final investment decision was taken on the South Stream project in Serbia.

In February 2013 the Skupstina (Serbian Parliament) awarded South Stream in Serbia with the special status.

Banatski Dvor, one of the major Eastern European UGS facilities located in Serbia, was the first facility commissioned within the South Stream project. The Banatski Dvor UGS, with a working gas capacity of 450 million cubic meters and maximum deliverability of 5 million cubic meters per day, became operational in November 2011.

In March 2013 the long-term Contract was signed for Russian natural gas supply to Serbia in the amount of up to 1.5 billion cubic meters of gas annually for a period of 10 years. Gas will be conveyed via the existing route and in the future – via the South Stream gas pipeline.

Srbijagas is a state-owned company dealing with natural gas transmission, distribution and storage in Serbia.

In 2012 Gazprom supplied Serbia with 1.9 billion cubic meters of natural gas.

SOURCE: GAZPROM, 2013

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