LONDON (ICIS) – Serbia plans to build a new underground gas storage facility (UGS) and import LNG volumes from Greece in 2023, Serbian Energy Minister Zorana said on Thursday. Mihajlovic.

Mihajlovic said that the interruption of Russian gas supplies to Poland and Bulgaria will have an impact on the economy and energy sectors of the European Union and the Balkan region.

“Our long-term goal is to diversify gas supplies and when the 1.8 billion cubic meter (bcm) per year Bulgarian-Serbian link is completed in September next year, we will negotiate a contract for the gas LNG terminals in Greece or imports from Azerbaijan,” said Mihajlovic.

The Minister also said that the country plans to book LNG cargoes on a one-off and long-term contractual basis from the Revithoussa LNG import terminal in Greece.

Serbia also plans to start construction of the new UGS facility in early 2023, the energy minister added.

The country aims to store a total of 2 billion cubic meters of gas per year, the managing director of state-owned gas supplier Srbijagas, Dusan Bayatovic, said on March 31.

Currently, the country has the Banatski Dvor UGS facility with a capacity of 450 million cubic meters (mcm). Gazprom has a 51% stake in the facility, with Srbijagas controlling the rest.

Banatski Dvor’s capacity is currently being expanded from 450 to 550 million cubic meters, talks on a new contractual agreement with Russian state supplier Gazprom are ongoing and we are negotiating with other countries on a joint storage facility between Serbia , Bulgaria and Hungary,” Mihajlovic said on Thursday. .

The country will launch a crisis plan if Bulgaria decides to cut off the gas supply to Serbia, the energy minister added.

The new announcements come as Serbia plans to complete negotiations on a new 10-year gas contract with Gazprom by mid-May, Bayatovic said in late March.

MERCHANTS’ PERSPECTIVE

Balkan traders said plans for a new UGS facility and LNG imports from Greece will play an important role in ongoing talks over a new deal with Gazprom.

“It’s a smart move, as Serbia could negotiate a better pricing formula with Gazprom for future deliveries amid additional LNG and Azerbaijan imports,” one said.

A second source said Serbia was seeking additional gas volumes amid growing volatility in the European gas market.

“It makes sense to lock in future gas deliveries given the current market environment in Europe. The TTF’s first month contract has been extremely volatile since the start of the Russian-Ukrainian conflict,” added a third gas trader. of the Balkans.

The first month of ICIS TTF traded at €100.25/MWh at 2:27 p.m. UK time on Thursday, down more than 6% from the previous day’s valuation.

The same source said that Serbia may have a good mix of Russian pipeline, LNG and Azeri volumes in the future, which could lead to cheaper gas prices in the country.

A fourth source said that Serbia, alongside other Balkan states, should work on a common gas policy and build more storage facilities.