Serbia's gas monopoly to borrow $270 mln

Serbia's Srbijagas gas monopoly will have to borrow $270 million in the coming months to make up for the cost of alternative supplies from Western Europe.

Serbia's gas monopoly  to borrow $270 mln

Serbia's Srbijagas gas monopoly will have to borrow $270 million in the coming months to make up for the cost of alternative supplies from Western Europe, as the energy row between Russia and Ukraine entered a second week.

"That ($270 million) is an estimate of what we will spend between December 2008 and February 2009," Dusan Bajatovic, the general manager of Srbijagas, told Reuters on Thursday.

Bajatovic could not disclose more detail on the company's borrowing plans, but said that Srbijagas needed "to secure $90 million for December gas supplies to pay for procurements in January and February".

Serbia has secured alternative gas supplies from Austria, Germany and Hungary until Jan 20.

On Wednesday, Hungary's Energy Minister Csaba Molnar said his country could cover its domestic gas consumption needs for another week, as well as transits to Serbia and Bosnia without having to impose any further restrictions on users if Russian gas shipments via Ukraine do not resume.

An EU-brokered deal earlier this week to get supplies of the Russian gas moving to Europe via Ukraine has failed to break the deadlock between the two former Soviet states and supplies to 18 countries remain disrupted.

Bajatovic earlier said that Srbijagas' lawyers were instructed to investigate legal grounds for filing a lawsuit against Ukraine's gas monopoly Naftogaz Ukrainy over the cutoff of gas supplies.

The lack of gas has forced many households to switch to electricity for heating and the government, in session later in the day, is expected to discuss whether to cut gas bills for household consumers for December and January.

Bajatovic also said the government would need to complete the major underground gas storage in the northern town of Banatski Dvor. The completion would cost 22 million euros ($28.92 million), he said.

Once completed, Serbia will need $100 million worth of gas supplies to fill the storage and would have to negotiate supplies with Russia's Gazprom, he added.

Late last month, Serbia and Russia finalised a bilateral energy pact, with Belgrade agreeing to sell a 51 percent stake in its oil monopoly NIS to Gazprom Neft for 400 million euros in exchange for an arm of the South Stream gas pipeline and the completion of the Banatski Dvor gas storage.

The South Stream has been designed to transport Russian gas under the Black Sea and Bulgaria, via Serbia and onwards to Europe, bypassing Ukraine, but the project development is not expected to start before 2013.

Reuters
Last Mod: 15 Ocak 2009, 14:54
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