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Azerbaijan will supply up to 400 million cubic meters (14.13 billion cubic feet) of gas per year to Serbia under a deal between the State Oil Company of the Azerbaijan Republic (SOCAR) and JP Srbijagas.
The agreement was secured during a meeting in Azerbaijan between the two countries’ energy ministries, during which the ministries also inked a memorandum of understanding (MOU) for broader cooperation in the gas sector.
The MOU “provides for the supply of LNG to Serbia, cooperation with SOCAR in gas storage areas and the company’s participation in gas trading operations, as well as in the construction of a gas power plants”, the Energy Ministry in Baku said in a press release.
The pipeline gas will be delivered through the Bulgaria-Serbia Interconnector starting next year.
“With the documents of strategic importance we signed today, we are laying the foundation for multifaceted cooperation in the field of gas, including gas supplies from Azerbaijan to Serbia for the first time”, Azerbaijan Energy Minister Parviz Shahbazov said in a statement.
“Serbia is Azerbaijan’s new partner in diversifying the gas market in Europe”, the minister added, noting Serbia has now become the eighth country to subscribe to gas from Azerbaijan.
Serbia Mining and Energy Minister Dubravka Djedovic Handanovic commented, “After the supply of Azerbaijani gas to Serbia via the Bulgaria-Serbia Interconnector, which is expected to be commissioned in the near future, we are going to achieve our strategic goal of diversifying our sources of supply for this energy source and further bolstering our role as a transit country for gas distribution to Central Europe”.
Russia has been Serbia’s number one source of natural gas, accounting for 1.82 million metric tons or over 83 percent last year, with Russia also among Serbia’s top suppliers for petroleum, according to data from Serbia’s statistics agency PBC. Russia’s majority-state-owned Gazprom Neft PJSC is also the majority owner with a 50 percent share capital in the Serbian state’s oil and gas company NIS.
But the European Union wants Serbia to diversify its gas market away from Russia as Belgrade seeks EU membership.
In in a visit to the country last year, EU President Ursula von der Leyen told Serbian President Aleksandar Vucic in light of Russia’s invasion of Ukraine the EU is boosting energy investments in the Western Balkans as part of efforts to secure regional peace.
Speaking of high energy prices, Von der Leyen said, “This energy crisis stems from the atrocious war that Russia is leading against Ukraine”.
“And this war is redefining the security landscape of our entire continent”, she said, according to a transcript on the European Commission website October 28, 2022. “So it is for the European Union of utmost importance to invest even further in our Western Balkan partners – more than ever before because these investments are investments for the future”.
Von der Leyen added, “And let me assure you that the European Union is and will remain Serbia’s most important political and economic partner… And as you know, we want you to take now the next further very important steps towards the European Union”.
Toward the goal of helping Serbia curb reliance on Russian energy, the EU has funded the 170-kilometer (105.63-mile) Bulgaria-Serbia Interconnector pipeline as a regional priority project.
“The project is necessary to enable Serbia to diversify gas supplies, reduce import dependence on Russian gas, and provide alternative supply routes in South-East Europe”, the European Commission said in a statement February 1, 2023 announcing the start of construction.
The project will be put into use through the agreement announced this week between Serbia’s Srbijagas and Azerbaijan’s SOCAR.
To contact the author, email jov.onsat@rigzone.com
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