Location permit issued for South Stream pipeline

BELGRADE Dusan Bajatovic, general manager of the joint-venture company South Stream Serbia, has been given the location permit for the construction of the pipeline. The location for the major infrastructure project was presented to Bajatovic on Wednesday by Minister of Construction Velimir Ilic in the presence of Minister of Natural Resources, Mining and Spatial Planning Milan Bacevic and Minister of Regional Development and Local Self-Government Igor Mirovic. Location permit issued for South Stream pipeline Construction works on the Serbian stretch of the South Stream gas pipeline are due to commence on November 24. This major gas pipeline is one of the biggest investments in Serbia in the last several decades, and as Bajatovic - who also heads the state-owned natural gas company Srbijagas - announced, everything is ready for the beginning of works, which will take around two years, and the project will cost EUR 1.925 billion, according to the latest estimates.Serbia has only to invite tenders, and choose a contractor in the next two or three weeks, he said. The ceremonial opening of works on the South Stream section across Serbia has been scheduled to take place in the village of Kovilj in Vojvodina, northern Serbia, while other on-the-ground works are due to begin in February. The Serbian section of the South Stream gas pipeline will be 421 km long, around 25,000 people will be directly involved in its construction, and indirectly around 100,000 workers from Serbian construction companies, equipment makers and companies in the services sector. Thanks to the project, Serbia will become a regional energy hub, be secure in terms of energy, have an opportunity to build gas power plants, and is expected to have revenues of several hundred million euros from transit taxes. South Stream will enter Serbia from Bulgaria near Zajecar, eastern Serbia, and exit near Subotica, northern Serbia, with two planned branches toward Croatia and Republika Srpska in Bosnia-Herzegovina, and the option is being considered that one branch goes toward Macedonia and Kosovo and Metohija. The project in Serbia will be realized by the joint-venture company South Stream Serbia, in which the Srbijagas public enterprise holds a 49 percent stake, and Russia's Gazprom the remaining 51 percent. By November 24, three more agreements have to be signed with Russia for South Stream- the agreement which will define the gas pipeline as the project of general interest, the agreement on gas transport stipulating that the Russian side will have a claim on the capacity of that gas pipeline, and the agreement on the loan that is needed for realizing the project. It has been announced that the South Stream project in Serbia will have EUR 500 million at its disposal in 2014 and the gas pipeline is due to come into operation by the end of 2015. L-R: Velimir Ilic, Zorana Mihajlovic, Milan Bacevic, Dusan Bajatovic (Tanjug) "Four objections" The Russian side had four objections to the inter-state energy agreement with Serbia, all concerning the Serbian Ministry for Energy, Minister of Mining Milan Bacevic and the co-chairman of the Committee for Cooperation with the Russian Federation said in an interview to the latest issue of the NIN weekly. He explained that the Russians objected to the debt of Srbijagas of EUR 225 million for delivered gas, and to certain property which NIS has the right to, and to which both Transnafta and Srbijagas now lay claim, Beta news agency reported. The third problem, in his words, is connected with the Serbian government's document regarding the NIS export strategy until 2015, which the Russian side labeled as interference with the policy of operations during the talks in Moscow, and the fourth issue is the implementation of the gas agreement, i.e. the attempts by the Serbian Ministry for Energy to amend it, which the Russian side, according to Bacevic, will not allow. He explained that this was connected with the request by Minister for Energy Zorana Mihajlovic for an increase in the mining fee, which is currently three percent, and for the removal of intermediaries in the imports of gas from Russia to Serbia - the Jugorosgas and RST companies. The minister added that Mihajlovic is right in claiming that the mining fee of three percent is low and that Serbia loses EUR 25 million annually because of it, but that, on the other hand, Serbia is not paying penalties for the gas it did not use, which would add up to EUR 200-300 million per year. Beta Tanjug

Location permit issued for South Stream pipeline

Construction works on the Serbian stretch of the South Stream gas pipeline are due to commence on November 24.

This major gas pipeline is one of the biggest investments in Serbia in the last several decades, and as Bajatović - who also heads the state-owned natural gas company Srbijagas - announced, everything is ready for the beginning of works, which will take around two years, and the project will cost EUR 1.925 billion, according to the latest estimates.Serbia has only to invite tenders, and choose a contractor in the next two or three weeks, he said.

The ceremonial opening of works on the South Stream section across Serbia has been scheduled to take place in the village of Kovilj in Vojvodina, northern Serbia, while other on-the-ground works are due to begin in February.

The Serbian section of the South Stream gas pipeline will be 421 km long, around 25,000 people will be directly involved in its construction, and indirectly around 100,000 workers from Serbian construction companies, equipment makers and companies in the services sector.

Thanks to the project, Serbia will become a regional energy hub, be secure in terms of energy, have an opportunity to build gas power plants, and is expected to have revenues of several hundred million euros from transit taxes.

South Stream will enter Serbia from Bulgaria near Zaječar, eastern Serbia, and exit near Subotica, northern Serbia, with two planned branches toward Croatia and Republika Srpska in Bosnia-Herzegovina, and the option is being considered that one branch goes toward Macedonia and Kosovo and Metohija.

The project in Serbia will be realized by the joint-venture company South Stream Serbia, in which the Srbijagas public enterprise holds a 49 percent stake, and Russia's Gazprom the remaining 51 percent.

By November 24, three more agreements have to be signed with Russia for South Stream- the agreement which will define the gas pipeline as the project of general interest, the agreement on gas transport stipulating that the Russian side will have a claim on the capacity of that gas pipeline, and the agreement on the loan that is needed for realizing the project.

It has been announced that the South Stream project in Serbia will have EUR 500 million at its disposal in 2014 and the gas pipeline is due to come into operation by the end of 2015.

"Four objections"

The Russian side had four objections to the inter-state energy agreement with Serbia, all concerning the Serbian Ministry for Energy, Minister of Mining Milan Bačević and the co-chairman of the Committee for Cooperation with the Russian Federation said in an interview to the latest issue of the NIN weekly.

He explained that the Russians objected to the debt of Srbijagas of EUR 225 million for delivered gas, and to certain property which NIS has the right to, and to which both Transnafta and Srbijagas now lay claim, Beta news agency reported.

The third problem, in his words, is connected with the Serbian government's document regarding the NIS export strategy until 2015, which the Russian side labeled as interference with the policy of operations during the talks in Moscow, and the fourth issue is the implementation of the gas agreement, i.e. the attempts by the Serbian Ministry for Energy to amend it, which the Russian side, according to Bačević, will not allow.

He explained that this was connected with the request by Minister for Energy Zorana Mihajlović for an increase in the mining fee, which is currently three percent, and for the removal of intermediaries in the imports of gas from Russia to Serbia - the Jugorosgas and RST companies.

The minister added that Mihajlović is right in claiming that the mining fee of three percent is low and that Serbia loses EUR 25 million annually because of it, but that, on the other hand, Serbia is not paying penalties for the gas it did not use, which would add up to EUR 200-300 million per year.