Serbia interested in importing Azerbaijani gas through Southern Gas Corridor – deputy PM
Trend’s exclusive interview with Serbia’s Deputy Prime Minister and Minister of Mining and Energy, prof. Dr Zorana Mihajlović
Question: How do you assess the current level of energy cooperation with Azerbaijan?
Answer: Serbia and Azerbaijan are strategic partners countries, and our economic cooperation over the previous years has been particularly marked by successfully implemented projects in the field of transport infrastructure.
We would like to have equally good cooperation in the field of energy, as there is a common interest of the two countries for that. I will remind you that these two countries signed the Memorandum of Understanding in this area in 2011.
Serbia seeks to diversify its sources of gas supply, and is interested in the possibility of supplying natural gas from Azerbaijan. This year, Serbia will start the construction of the Serbia-Bulgaria gas interconnection, which should become operational in 2023. With this interconnection, we will be able to connect with other potential suppliers, including gas pipelines on the Southern Gas Corridor – TANAP and TAP. To that end, there is a lot of room for cooperation between the two countries in the field of energy to intensify and be raised to a higher level in the coming period.
Q.: What are the prospects and the ways of expanding those relations?
A.: In addition to opportunities for cooperation and connections in the gas sector, this year Serbia has innovated its legal framework in the energy sector, with a particular emphasis on green energy and energy efficiency. We are convinced that modern legal solutions in this area will contribute to greater interest and volume of investments in the energy sector.
Q.: Serbia is building an interconnector with Bulgaria (IBS), which could connect to the Southern Gas Corridor. At what stage is the implementation of IBS?
A.: A loan agreement for was signed with the European Investment Bank (EIB) in mid-May, completing the financial structure for the construction of the Niš-Dimitrovgrad gas pipeline. In addition to this Eur 25 million loan, almost Eur 50 million had been previously provided through the EU IPA programme, and the remaining funds will be provided by the state. The tender for supervision was published in January, and in March also the tender for a contractor. We expect that the procedures for the selection of contractors, conducted according to the EU rules, will be completed at the end of summer, and that we will start works in the last quarter of this year, so that the gas pipeline becomes operational in mid-2023. Just to mention that total length of the gas interconnection from Niš to Sofia is about 170 km, 109 km of which goes through the territory of Serbia.
Q.: When approximately do you expect to connect to the Southern Gas Corridor?
A.: Strategic commitment of the Republic of Serbia is to diversify the sources and routes of supply, as well as to connect to all neighbouring gas pipeline systems. Serbia is interested in supplying Azerbaijani gas through the Southern Gas Corridor, and that is why it is very important to build the interconnector with Bulgaria as soon as possible, which will enable further diversification of gas routes and diversification of suppliers. Following the construction of the interconnector between Greece and Bulgaria, it will be possible to supply Serbia with natural gas from the LNG terminal in Greece and from the TAP (Trans-Adriatic Pipeline) pipeline, which is a part of the Southern Gas Corridor that transports the gas from the Caspian and Middle East regions. Also, the construction of the interconnection between Turkey and Bulgaria will enable the supply of the TANAP (Trans-Anatolian Pipeline) gas pipeline, which is also a part of the Southern Gas Corridor. Finally, the Niš-Dimitrovgrad gas pipeline gives Serbia the opportunity to join the Eastern Mediterranean Project, which would bring gas from Cyprus and Israel to Serbia through Greece and Bulgaria, and that would further increase the level of gas security not only in Serbia but also in the region.
A.: What are the prospects for cooperation between Azerbaijan and Serbia in the alternative energy sphere?
A.: The Republic of Serbia has recognised alternative energy as an important segment of energy transition and contribution to the goals set by the Green Agenda for the Western Balkans, by which Serbia, together with other countries in the region, joined the goals of the European Green Agreement.
Speaking specifically about renewable energy sources (RES), Serbia has passed this year and for the first time a special Law on the Use of RES, in order to accelerate investments in this sector and enable greater share of RES in the energy mix. Our goal is to get at least 40 percent of energy from renewable sources by 2040, and 50 percent by 2050, which is why the focus of new investments will be on the construction of large and medium hydropower plants and greater utilisation of RES, with the construction of gas power plants that are important for the system stability. The new investment plan that the Ministry is preparing is directly related to the energy transition of Serbia, and includes projects in all areas under the responsibility of this Ministry worth about Eur 17 billion, including investments of the public and private sector. When it comes to the electrical power sector, the planned investments amount to more than Eur 7 billion, and about Eur 5 billion is the value of projects in the areas of solar and wind energy, where we expect large investments in the coming years.
This Law creates conditions for the use of completely new technologies that are important for energy transition and decarbonisation, such as green hydrogen, commercial use of which is just at the beginning, and for the development of which the EU adopted its strategy less than a year ago.
I believe that our international partners and investors already recognise everything that Serbia has done to improve its legal framework, and that this will open new opportunities for the development of cooperation between Serbian and Azerbaijani companies, potential new investments and the implementation of joint projects.
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