Serbian president signs ‘beneficial’ gas deal with Vladimir Putin

Serbian president signs ‘beneficial’ gas deal with Vladimir Putin

Serbia has concluded a favorable agreement on the supply of Russian natural gas. However, the details of this agreement will only be revealed in the coming days, President Aleksandar Vučić said following a phone call with Russian President Vladimir Putin on Sunday (May 29).

Serbia will continue to receive Russian gas according to the favorable formula it currently enjoys, calculated on the basis of oil prices on the world market, Vučić told reporters after the call.

This means that Serbia would have by far the best gas price in Europe, added the Serbian President, underlining the “very good maintenance [avec le président russe] on several topics, the most important of which was our bilateral relations and the gas agreement”.

“We will sign a three-year contract, and tomorrow or the day after tomorrow we will discuss the amount of gas. Serbia needs large quantities of gas, but […] we will have a safe winter, while the price of gas will depend on the continuation of the discussions”Mr. Vučić said.

The price that Serbia would pay to the Russian company Gazprom for natural gas is currently a third of the price paid by other European countries, the Serbian president said. That price could drop to a tenth or a twelfth of that figure during the winter period, with prices expected to be between $340 and $350 per 1,000 cubic meters, he continued.

Aleksandar Vučić also said that the agreed price applied to 2.2 billion cubic meters of natural gas per year and that his country needed an additional 800 million cubic meters. Serbia is negotiating a new natural gas contract with Gazprom due to the expiration on May 31 of the six-month deal signed in November 2021. Russian natural gas currently costs Serbia $270 per 1,000 cubic meters .

Gazprom is the majority owner of Serbia’s oil industry, either directly or through subsidiaries. It is also the sole supplier of natural gas in the country and the majority owner of the two gas pipelines that transport Russian gas to Serbia.

The Kremlin confirmed that Mr Putin and Mr Vučić had agreed that Moscow would continue to supply natural gas to Belgrade. The two presidents exchanged opinions on a number of topics, including the situation in Ukraine and the disagreements with Kosovo. They also have “reaffirmed the mutual disposition” to constantly strengthen their countries’ strategic partnership based on the traditionally close ties between their two nations, reads a Kremlin press release.

Serbia now imports 81% of its gas and 18% of its oil and oil derivatives from Russia.

According to experts, Serbia’s annual natural gas consumption is about three billion cubic meters, of which 49% is for heating installations and power plants, while 26% is for industry.

Serbian households consume about 13% of the total amount of gas, while shopping centers and other businesses use about 10%. On the other hand, the agriculture and transport sectors represent only 2%.

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