Led by Alexander Medvedev, Deputy Chairman of Gazprom’s Management Committee, Gazprom’s delegation traveled on 27 January to the Republic of Serbia, holding meetings with Boris Tadic, Serbian President, Vojislav Kostunica, Serbian Prime Minister and Miroljub Labus, Serbian Deputy Prime Minister.

The parties reviewed issues of deeper cooperation in the gas sector, including in natural gas deliveries to Serbia and promising investment projects in the Republic.

The parties also agreed to further develop the Russian-Serbian joint venture Yugorosgaz to be engaged in top priority projects embracing the construction of the Banatski Dvor underground gas storage facility and Nis – Dimitrovgrad gas pipeline towards Bulgaria.

A focus of the meetings fell on the issue of settling the debt of Srbijagas (formerly NIS) to Gazprom for the Russian natural gas supplied to ex Yugoslavia between 1995 and 2000.

Boris Tadic confirmed the Serbian leadership’s readiness to provide full-fledged support for closer business ties between Gazprom and Serbian energy companies.

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Starting 2001 Russian natural gas has been supplied to Serbia by Gazexport in pursuance of a contract with the Serbian state-owned firm NIS (Naftna Industrija Srbije - Serbian Oil Industry) re-incorporated as the state-run firm Srbijagas in October 2005. The contract on gas supply to Serbia over 2006 was signed on 14 December 2005.

In 2005 Gazexport provided Serbia with over 2 bcm of Russian gas and 2-2.1 bcm is slated for 2006.

As of 20 November 2005 Srbijagas’ debt to Gazprom stood at US $235.3 mln.

Yugorosgaz was established on 11 April 1996 within the Agreement (between the Government of the Russian Federation and the Federal Government of the Federal Republic of Yugoslavia) on cooperation in the construction of gas pipelines in the Federal Republic of Yugoslavia. Yugorosgaz is co-owned by Gazprom (50%), NIS GAS (20%), Progresgas Trading (10%) and other former Yugoslav companies (20%).

Yugorosgaz is mainly focused on stage-by-stage gas pipeline construction in southern Serbia, including the Nis – Dimitrovgrad - Pojate gas main designed to link the gas pipeline networks of Bulgaria and Serbia & Montenegro to be supplied with gas via Romania and Bulgaria. The Pojate - Nis section was brought online in 2003.