Today in Belgrade as part of the official visit by Russian Prime Minister Vladimir Putin to Serbia, Alexey Miller, Chairman of the Gazprom Management Committee took part in the negotiations with the country's leadership.

Furthermore today in Belgrade Marcel Kramer, Chief Executive Officer of the South Stream project and Leonid Chugunov, Head of the Gazprom Project Management Department held the presentation “South Stream – Contribution to Europe's Competitiveness in the Energy Sector” attended by representatives of Serbia's business and political community. Oliver Dulic, Minister of Environment and Spatial Planning of Serbia and Dusan Bajatovic, Chief Executive Officer of Srbijagas also participated in the event.

Special attention was paid to highlighting the South Stream project implementation in Serbia. In particular, it was noted that Serbia would be the centerpiece in the gas transmission scheme under any of existing options for the South Stream gas pipeline route.

Marcel Kramer and Leonid Chugunov also stressed that the South Stream implementation would have a positive impact on the economies of the countries participating in the project and on the entire region.

“Our estimates indicate that the South Stream gas pipeline construction in Serbia will allow creating some 2.5 thousand new jobs in the country, attracting up to EUR 1.5 billion of direct investments and ensuring gas transmission revenues of EUR 4 billion throughout 25 years of its operation,” said Marcel Kramer.

“Besides solving a Europe-wide task for additional gas deliveries, the South Stream gas pipeline construction in Serbia will provide a strong impetus for the gas transmission system development in the country guaranteeing its energy security. The volume of gas supplies for meeting Serbia's needs via South Stream will account for around 4 billion cubic meters of gas a year,” said Leonid Chugunov.

Background:

The South Stream project is implemented with a view to diversify the routes of natural gas supply to European consumers and envisages construction of a gas pipeline running under the Black Sea to the countries of Southern and Central Europe.

A provision is made to gradually build up the South Stream throughput. The overall design capacity of the offshore section will reach 63 billion cubic meters per year. The first gas pipeline string is scheduled for commissioning in late 2015.

Intergovernmental agreements were signed with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria 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.

In 2009 Gazprom supplied 1.7 billion cubic meters of natural gas to Serbia.

Founded on October 1, 2005 by the Government of the Republic of Serbia 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.

On January 25, 2008 Russia and Serbia signed the Umbrella Intergovernmental Agreement for the South Stream project and the Banatski Dvor UGS facility.

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

In November 2009 the South Stream Serbia AG registration 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 UGS 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 an underground storage 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.