Russia, Serbia sign gas pipeline deal

February 25th, 2008 - 8:22 pm ICT by admin  

RIA Novosti
Belgrade, Feb 25 (RIA Novosti) Russia and Serbia signed Monday an agreement on a project to construct a pipeline for transit of Russian natural gas through Serbia to the Balkans and other European countries. The agreement was signed in Belgrade in the presence of Russia’s First Deputy Prime Minister Dmitry Medvedev and Serbian Prime Minister Vojislav Kostunica.

“This agreement serves interests of both Russia and Serbia, and lays the foundation for the regime of energy security in the unified Europe,” said Medvedev, who is the Kremlin’s front-runner in the upcoming presidential elections.

The South Stream project envisages transportation of 10 billion cubic metres of gas annually across the Black Sea.

Russia’s Gazprom Neft signed a deal on the purchase of a 51 percent stake in Serbia’s state-owned oil monopoly Naftna Industrija Srbije (NIS) during talks between the two countries’ leaders in Moscow Jan 25.

Gazprom had reportedly offered $580 million for 51 percent stake in NIS amid fears in Europe that it is increasingly becoming dependent on Russia for energy.

The joint construction of a stretch of a natural gas pipeline with Russia’s Gazprom under the South Stream project will turn Serbia into a regional economic leader, Serbia’s prime minister said.

The South Stream pipeline proposed by Russia’s Gazprom and Italy’s Eni is a rival project to the US and the European Union backed Nabucco pipeline, which will pump Central Asian gas to Europe via Turkey bypassing Russia.

The pipeline will run from Russia’s Black Sea coast under the sea to Bulgaria, where it will branch off to different destinations in the EU, supplying 30 billion cubic metres of gas annually.

Serbia initially planned to sell a 25 percent stake in NIS for $300 million and oblige the buyer to invest another $250 million in the development of the company. The company is estimated as being worth $1.2 billion.
RIA Novosti

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