With only 13 kilometers of gas pipelines on its territory and 85 that will be built by Romania, Serbia will get a new direction of supply and a new source of gas.
The announced gas pipeline will be the second that Serbia will have with partners from the European Union, after a complete dependence on Russian gas for more than a quarter of a century.
As announced, the gas pipeline will connect the hub in Mokrin in Serbia with the BRUA transport pipeline in Romania.
Route of the new gas pipeline between Serbia and Romania
The Ministers of Energy of Serbia and Romania, Dubravke Đedović Handanović and Sebastijan Burduža, signed a Memorandum of Understanding on the construction of a gas interconnector on August 5.
"Transgaz can provide gas transit (to Serbia) from the Caspian Sea, liquefied gas from terminals in Greece and Turkey, as well as gas that (Romania) will exploit in the Black Sea," Ion Sterian, CEO, told Radio Free Europe (RSE). director of the majority state-owned Romanian gas company Transgaz.
He clarifies that BRUA is not only a transit gas pipeline, but part of the Romanian national gas transportation system into which gas from domestic, Romanian production is also pumped.
"Romanian gas is exported through that pipeline," says Sterian.
Serbian energy expert Dragan Vlaisavljević points to the importance of the new gas connection between Serbia and Romania.
"One of the potential sources of gas that will be very important are the new gas plants in the Black Sea, which Romania will have at its disposal in the next decade," Vlaisavljević told RSE.
What is known about the pipeline?
According to the Memorandum signed in Kladovo, a border town in Serbia on the border with Romania, the gas pipeline will be two-way, so gas will be able to be transported to both countries.
The projected capacity, as announced by the Ministry of Energy of Serbia, will be "at least 1,6 million cubic meters of gas", and the section of the gas pipeline on the territory of Serbia should be completed by 2027.
As the director of the Romanian company Transgaz Ion Sterian stated for RSE, the estimated value of the share through Romania is around 80-85 million euros.
"After the meeting with the director of Srbijagas (a public gas trading company in Serbia), we will update all prices and then we will have the exact value of the project," said Sterian.
He added that Romania will finance the part of the gas pipeline on its territory with its own funds, which are included in the company's planned development costs.
The public company Srbijagas, which will manage the construction of the gas pipeline section in Serbia, did not respond to RSE's inquiry about how much the gas pipeline section will cost and how it will be financed until the end of the text.
What does Serbia get?
In addition to reducing its own dependence on Russian gas, with the new connection, Serbia becomes an important transit country for the transport of gas to Central Europe.
"Thanks to the connection with Romania and Bulgaria, and in the coming period also with North Macedonia, Serbia is becoming an indispensable transit country and an important partner in ensuring the energy security of the countries of Central and Eastern Europe when it comes to gas supply," said Serbian Energy Minister Dubravka on August 5. Đedović Handanović.
Russia's invasion of Ukraine in February 2022 was met by Serbia completely dependent on Russian energy supplies. Following the example of the countries of the European Union (EU), whose membership it aspires to, it started looking for an alternative for Russian gas.
Energy expert Dragan Vlaisavljević told RSE that an important factor is that the gas pipeline will enable "gas delivery in one direction and in the other when it is needed for both markets".
"Very likely, there will be a much greater need for Serbia," he says.
When Romania completes the construction of a gas plant in the Black Sea, Serbia's gas connection with that country will ensure, in his opinion, "a safe and secure supply of gas for the needs of the economy and population" in Serbia.
In December 2023, Serbia opened a gas interconnector with Bulgaria - from the Bulgarian city of Novi Iskar to Niš in the south of Serbia. It thus gained access to gas from Azerbaijan and to the liquid gas terminal in the Greek port of Alexandroupoli.
The capacity of the gas pipeline is 1,8 billion cubic meters per year, which represents more than half of Serbia's annual gas needs. However, the agreed quantities with Azerbaijan in 2024 are 400 million cubic meters of gas, which meets 13 percent of needs.
The plan is to increase deliveries to one billion cubic meters from 2027, which would cover a third of Serbia's needs.
Serbia annually imports 2,2 billion cubic meters of gas from Russia, which is almost three quarters of the current needs of three billion.
The three-year arrangement until 2025 was directly agreed upon by Serbian President Aleksandar Vučić and Russian President Vladimir Putin in May 2022, three months after Moscow launched its invasion of Ukraine.
Serbia has not imposed sanctions on Russia, despite the fact that, as a candidate country for EU membership, it is obliged to gradually harmonize its foreign and security policy with the European one. Dependence on Russian energy sources was one of the main arguments of the authorities in Belgrade for such a position.
What does Romania get?
Unlike Serbia, which meets less than 13 percent of its gas needs from domestic production, Romania produces more gas than it needs.
Serbia is the only neighboring country with which Romania does not yet have a gas connection, and it is a new export market for Romanian gas, Eugenija Gušilov, founder of the Romanian Energy Center (ROEC), a think-thank from Bucharest, told RSE.
"Romania wants to diversify its potential export markets for the excess natural gas that it will exploit and produce from the Black Sea from 2027. Romania is primarily thinking about where it could deliver or export gas closer to home," Gušilov assesses.
According to Transgaz, Romania currently produces almost twice as much gas as it needs.
It achieves the production of 24 million cubic meters of gas per day, while the needs are around 12,5 million.
The difference is mainly saved for consumption in the winter months, while a million to two cubic meters of gas remains for export per day.
That will change, as Transgaz director Ion Sterian told RSE, when Romania starts exploiting gas from the Black Sea. Then, according to him, the amount of domestic gas will increase significantly, and thus the possibility of export.
Energy cooperation between Serbia and Romania
The cooperation between Serbia and Romania, more than half a century long, is reflected, first of all, in electricity trade.
According to data from the Serbian Ministry of Energy, in 2023, 28 percent of the total exchange between the two countries was electricity trade.
Negotiations are underway on Romania's participation in the construction of the "Đerdap 3" hydroelectric power plant, which the Government of Serbia declared a project of special importance.
This was discussed at the meeting on August 5 in Kladovo by the energy ministers of the two countries. In the announcement that the Ministry of Energy of Serbia forwarded to the media, there were no further details.
The Romanian side previously stated that "the Serbian side can realize this project only in close cooperation with Romania", whereby "the consequences for the environment and navigability must be carefully taken into account".
Russian gas still present in the EU
Russian gas arrives in Southeast Europe via Turkish Stream and Ukraine. Among the main users of Turkish Stream gas are Hungary and Serbia, two countries closely linked to Moscow.
Hungary signed a 15-year contract with Gazprom in September 2021 to supply 4,5 billion cubic meters per year. Russian energy giant Gazprom is not covered by European Union sanctions.
Through Ukraine, Russian gas reaches Austria and Slovakia - about 42 million cubic meters every day. The five-year gas transit agreement between Russia and Ukraine expires at the end of 2024, which could create problems for countries that depend on these imports, especially Austria and Slovakia.
ID card of the BRUA gas pipeline in Romania
The gas pipeline, which connects the national gas transport systems with Bulgaria and Hungary, is about 500 kilometers long.
The gas pipeline was built by the Romanian majority state-owned company Transgaz.
Through the BRUA pipeline, gas from Turkey, the Caspian Sea and the liquefied gas terminal in Greece arrives in Romania.
The construction cost 479 million euros, of which 180 million was provided through a grant from the European Union.
The main goal is to diversify the sources of gas supply and increase the energy security of EU countries, which means reducing the dependence of the European bloc on Russian gas.
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