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Serbia plans new gas storage facility amid EU energy tensions and supply uncertainty

As the European Commission pushes for a gradual phase-out of Russian energy imports by 2027, internal divisions threaten to derail progress. Hungary and Slovakia have strongly opposed the gas-related measures in the EU’s proposed 18th sanctions package, signaling they may block the initiative unless natural gas is excluded.

In contrast to these debates, Serbia is pursuing its own energy security agenda. With gas supply negotiations with Russia still in progress, the Serbian government has already approved a contingency plan for 2025, detailing domestic production capacities, import needs, and fuel reserves, including alternative fuels like fuel oil to power electricity generation in the event of gas disruptions.

Srbijagas Director Dusan Bajatovic revealed that the country is preparing to build a new gas storage facility near Belgrade, with investment estimates ranging from 350 to 500 million euros. Unlike strategic reserves, this facility will operate on a commercial basis, allowing for both storage and withdrawal. Once completed, it will complement the existing Banatski Dvor site and significantly enhance Serbia’s energy resilience.

Meanwhile, at the European level, gas storage sites are required to be at least 90% full between 1 October and 1 December. Current storage levels stand at just 55.7%, raising concerns about winter readiness. Bajatovic notes that storage is useful for balancing short-term demand peaks but cannot replace ongoing supply. He also critiques the EU’s measures as often being more symbolic than practical.

Europe currently imports 91 billion cubic meters of gas from Norway, 56 billion from Russia, and 45 billion from the United States. According to Bajatovic, U.S. export capacity is already maxed out, and any ban on Russian gas would result in widespread shortages and price increases. For Serbia, the direct impact of an EU embargo may be limited, but the indirect effects of EU market liberalization could be significant.

Bajatovic warns that if Srbijagas is stripped of its status as the guaranteed supplier and must compete on an open market, Serbia could face speculative pricing, supply instability, and reduced oversight. The long-term gas deal with Russia, expected to be finalized by 20 September, is designed to prevent these risks by ensuring consistent deliveries over the next decade.

However, the deal’s success hinges on Serbia’s ability to reconcile its energy policy with EU expectations, including market reforms. Legal and financial uncertainties remain, from possible sanctions to issues related to gas transit and delivery. Despite these challenges, the government aims to strike a balance between maintaining energy sovereignty and aligning with broader European frameworks.

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