Serbian state-owned gas monopoly
Srbijagas is expecting to get a loan of around 175 million euro ($233.9
million) from Gazprom in the first quarter of 2014 to fund works on the local
section of the South Stream gas pipeline, Srbijagas director general Dusan
Bajatovic said.
The move would mirror the funding pledged by the Russian company for the
construction of the South Stream section in Bulgaria. The loan will have an
interest rate of 4.25%, Bajatovic said in a taped interview posted on the
website of state-run broadcaster RTS on Tuesday.
Last
month, Bulgaria and Gazprom launched the construction works on Bulgarian
territory and announced that the 540 kilometre section there will be financed
with a 620 million euro loan which Gazprom will provide to the state-run
Bulgarian Energy Holding.
In November 2009, the South Stream Serbia AG joint project company was
registered with Gazprom holding 51% and Srbijagas controlling 49%. In October
2012 a final investment decision was approved for the South Stream project in
Serbia.
In early March, South Stream Serbia AG should have at its disposal some 500
million euro for the start of the pipeline's construction, Bajatovic added.
Bajatovic also said that further funding for the project will come in the form
of a 75 million euro loan that should get guarantees from the Serbian
government, while Gazprom will provide as much through a recapitalisation of
South Stream Serbia AG.
The remaining funds for the project will be secured through project financing
from commercial lenders, mostly Russian, the official added.
On Monday, the government in Belgrade said that the construction of the Serbian
section of the South Stream pipeline is set to formally get underway on
November 24.
The pipeline project would involve the construction of four subsections in
Serbia. The first one should link the eastern town of Zajecar with the central
town of Paracin, where the first compressor station will be located with a
second one planned to be located on the Paracin-Smederevo stretch.
The third section, between the northern towns of Kovin and Vrbas, is ready for
a construction permit and will include another compressor station, which will
be located in Vrbas. The last section will connect Vrbas with the border with Hungary
to the north.
The projects for a pipeline offshoot from Gospodjinci to the Croatian border
and from Belgrade to the border with Bosnia's Serb Republic have also been
completed while the project for an arm towards FYROM and Kosovo is currently
being drafted.
The 1.7 billion euro Serbian section of the pipeline will ultimately have an
annual capacity of 40.5 billion cubic metres of gas while stretching for 422.4
kilometres.
The Gazprom-spearheaded South Stream aims to diversify gas routes within the
European Union and to provide stable gas supplies from Russia to Central and
Southern Europe. Intergovernmental agreements have been signed with Bulgaria,
Serbia, Hungary, Greece, Slovenia and Croatia in order to implement the onshore
gas pipeline section.