Serbia "won't renegotiate South Stream agreement"

Srbijagas General Director Dušan Bajatović says there will be no new negotiations with Russia regarding the construction of the South Stream gas pipeline.

Source: Tanjug

"There will be no new talks between Russia, Serbia and other countries participating in South Stream about the construction of the pipeline, as all the agreements have been made at the inter-state level, and there will be no delay in works or moving of construction deadlines," the head of Serbia's state-run natural gas enterprise told Tanjug.

His statements came after the European Commission said that th bilateral deals were "in breach of EU law," and Gazprom reacted to this by saying that construction of the pipeline "would proceed as scheduled."

"All agreements related to South Stream have been made at the inter-state level, with nation-states, and not with the European Commission," said Bajatović, and added: "These agreements are above the national legislation of the countries participating in the project. All countries participating that are EU members - Germany, France, Italy, Hungary, Slovenia, Bulgaria - are aware of that."

He reiterated that for this reason, and because of the enormous political and economic importance of this project both for European countries and for Russia, there will be no new negotiations.

"The interests of Europe and Russia are simply so great that there is no way that an appropriate deal will not be reached," said Bajatović.

"I do not think that Serbia, as well as other participating countries, will have any problems due to the views of the European Commission, because all countries secured what was their economic interest in the negotiations," Bajatović said, adding that he "saw no reason not to adhere to what has been achieved in the negotiations."

South Stream is a development opportunity for Serbia and Bulgaria, Hungary, and other countries of South East Europe, and for Serbia it will mean not only the construction of the pipeline, but the presence of Russian capital and Russian investments in gas power plants and chemical industry, the Srbijagas director noted.

"We have an interest to raise our economy, and if someone does not like it, and offers no alternatives - I do not see how they think they can influence these processes. I simply think that this is now a political issue, and we should not allow this sort of political issue and blind support for EU officials and what currently exists in their laws, to reflect on our interests,"said Bajatović.

He emphasized that Serbia should stick to what is its own interest - "and that is to build South Stream, for it to be at full capacity, because with this project Serbia will be the hub and transit country for gas and electricity." According to Bajatović, it is also "highly possible" that Serbia will become the main country when it comes to storage capacities, that could reach as many as five billion cubic meters of gas per year.

As a confirmation that there will be no renegotiation of the agreements, Bajatović said that the EU "needs raw materials and energy, and, if it is to withstand the global economic competition, can rely primarily on Russia." Russia now supplies gas to 20 to 25 percent of the European market, and by 2035 that figure will grow to 60 percent, this Serbian official remarked.

Bajatović also said that he "did not see the mechanism by which the European Commission may be able to pressure countries taking part in the South Stream project" - including Serbia, which is not a member of the EU.

He pointed out that the South Stream can be exempt from the application of EU's Third Energy Package, because the gas pipeline is not a gas interconnection between several states but represents access to new sources of gas from Russia and Central Asian countries.

Bajatović cited as an example the TAP pipeline which also received an exemption, recalling that the owner of the pipeline was British Petroleum and that it stretched from Azerbaijan via Turkey, Greece, Albania, to the south of Italy.

He noted that the Nabucco gas pipeline project failed mainly because there was no guarantee of a long-term lease of the pipeline capacity, "because the project was simply not economically viable, which is not the case with South Stream."

Bajatović pointed out that strict EU rules that are now sought for South Stream did not apply to Nord Stream, and appraised that the former brought into play "huge interests."

He added that the South East European countries have not been offered any alternative to South Stream and that Serbia was not invited to participate in any other international project.

"If our country has undeniable benefits, and someone does not want it to happen because of some political or ideological reasons - in any case it cannot be economic reasons - then the question arises - what is the alternative?," Bajatović concluded.


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