Zurich (Switzerland) hosted today a working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Dusan Bajatovic, Chief Executive Officer of Srbijagas.

A detailed action plan was signed to implement South Stream in Serbia.

Alexey Miller and Dusan Bajatovic discussed the Banatski Dvor UGS facility project stressing that Gazprom and Srbijagas had reached a considerable progress in its execution: the bulk of permits required to initiate commercial operation of the underground gas storage facility by the Russian-Serbian joint venture had already been received. The rest of the permits will be obtained before long.

Background

In 2010 Gazprom export supplied Serbia with 1.76 billion cubic meters of natural gas.

Founded on October 1, 2005 by the Serbian Government within the reorganization of the state-owned Naftna Industrija Srbije – Serbian Oil Industry (NIS), Srbijagas is the Serbian state-owned company dealing with natural gas transmission, distribution and storage in Serbia.

With a view to diversify the natural gas export routes Gazprom is planning to construct a gas pipeline running under the Black Sea to the countries of Southern and Central Europe – the South Stream project.

Intergovernmental agreements were signed with Austria, Bulgaria, Croatia, Greece, Hungary, Serbia and Slovenia in order to implement the onshore gas pipeline section.

At present, the South Stream Consolidated Feasibility Study is being elaborated including the studies for the offshore section and for the respective gas pipelines in host countries of Southern and Central Europe.

On May 15, 2009 Gazprom and Srbijagas signed the Basic Agreement of Cooperation for the South Stream project in Serbia. The document set the specific principles of interaction between the parties at the pre-investment stage of the project and determined the conditions and the procedure of incorporation as well as the operation mechanisms for the joint project company.

In November 2009 registration of the joint project company, South Stream Serbia AG, was accomplished. Gazprom holds a 51 per cent stake in the company and Srbijagas – a 49 per cent stake.

On December 24, 2008 Gazprom and Srbijagas inked the Memorandum of Understanding on cooperation in gas storage as part of the Banatski Dvor project.

In October 2009 the Agreement on Setting up a Joint Venture for the Banatski Dvor UGS Facility was signed.

The joint venture responsible for construction and operation of the underground gas storage facility with the working gas capacity of 450 million cubic meters was registered in February 2010. The joint venture has the following shareholding structure: Gazprom – 51 per cent, Srbijagas – 49 per cent.

The Banatski Dvor UGS facility will be created on the basis of the eponymous depleted gas field situated 60 kilometers to the north-east of the Novi Sad town.