Is the end of Serbia’s dependence on Russian gas approaching?

The energy crisis of 2022, which emerged as a consequence of the outbreak of the war in Ukraine, motivated Serbia to plan and accelerate work in the energy sector more than at any time in the previous decade.

Until 2022, Serbia relied on only one source of natural gas supply. Of total consumption in Serbia, Russian gas accounted for 90 percent, while domestic production made up 10 percent.

During the past three—and soon four—years that the war in Ukraine has lasted, pressure has also persisted on European countries to abandon Russian energy sources.

One by one, countries separated themselves from Russian gas; one by one, gas pipelines that had supplied Europe with Russian gas for decades were shut down, leaving only one through which Serbia, together with Hungary and Bosnia and Herzegovina, continues to receive Russian gas.

This is the Turkish Stream, which itself has been targeted several times during the war, while Bulgaria has repeatedly threatened Serbia and Hungary that it would turn off the tap, as it does not want Russian gas to flow through its territory.

Serbia continues to receive Russian gas via this route, but fears of a possible interruption still remain. Media outlets are currently speculating whether Serbia could be left without Russian gas as of January 1, given that a new gas contract with Gazprom has not yet been signed.

Shortly before the start of the war in Ukraine, on February 1, 2022, Serbia began construction of a gas interconnection with Bulgaria. Construction was completed in December 2023, and since that winter Serbia has, for the first time, begun receiving gas from Azerbaijan—and for the first time gas that does not come from Russian gas fields.

The capacity of the gas interconnection with Bulgaria is 1.8 billion cubic meters, while only 400 million cubic meters are currently being used, which is the amount Serbia presently receives from Azerbaijan.

Under the agreement between Serbia and Azerbaijan, deliveries are planned to increase from 400 million cubic meters to one billion cubic meters of gas starting in 2026.

In addition to gas from Azerbaijan, this pipeline could also bring gas to Serbia from the LNG (liquefied natural gas) terminal in Alexandroupolis, Greece, where gas arrives from the United States, Algeria, Egypt, Norway, and other countries.

However, this pipeline with Bulgaria alone is not sufficient to cover Serbia’s needs, which amount to around three billion cubic meters of gas annually.

Therefore, further diversification has been announced through the construction of a gas interconnection with North Macedonia, whose capacity would be around 1.5 billion cubic meters of gas.

With the gas pipeline to Bulgaria of 1.8 billion cubic meters and the gas pipeline to North Macedonia of 1.5 billion cubic meters, Serbia would be fully freed from pressure to depend solely on Russian gas and would secure gas supplies covering its entire current consumption.

Although these two pipelines, relative to current consumption, would be sufficient to ensure Serbia’s gas needs, further diversification has also been announced—plans include the construction of a gas pipeline with Romania as well.

The Minister of Mining and Energy, Dubravka Đedović Handanović, recently stated that diversification will not only ensure greater security, but also a better negotiating position in terms of prices and capacities.

“The capacity of the gas interconnection with Bulgaria is 1.8 billion cubic meters per year. With the completion of the interconnection with North Macedonia, as well as the planned interconnection with Romania, whose capacity will be between 1.6 and 2.5 billion cubic meters, we will have fully diversified gas supply in the coming years. The goal is to have as many supply options as possible, not to depend on a single supplier, and to have greater security and a better negotiating position in terms of prices and capacities,” Đedović Handanović said.

Gas interconnector with North Macedonia

Last week, Minister Đedović Handanović spoke with North Macedonia’s Minister of Energy, Mining and Mineral Resources, Sanja Božinovska, about the construction of the Serbia–North Macedonia gas interconnection.

She stated that the goal is for the gas interconnector to be completed by the end of 2027, so that it could be put into operation at the beginning of 2028.

The length of the gas pipeline on the Serbian side will be 144 kilometers, and the estimated value of the investment is around €153 million. Part of the funds has been earmarked in the budget for 2026, the minister said.

Regarding the construction timeline, the minister announced that obtaining the construction permit is expected by mid-2026, after which construction would begin immediately.

The planned capacity of the gas interconnection with North Macedonia is around 1.5 billion cubic meters of gas, and the route would run Orljane–Leskovac–Vranje–the state border.

This would be another link to the LNG terminal in Greece.

Gas pipeline with Romania

Last year, Romania overtook the Netherlands to become the largest producer of natural gas in the European Union, though not in Europe as a whole, since Norway still holds that position.

The “Neptun Deep” gas field, discovered several years ago in the Black Sea, whose production could begin during 2027, will further strengthen Romania’s position as a supplier.

Some energy experts place great hopes in Romanian gas, viewing it as the main replacement for Russian “blue fuel.”

They emphasize that Romania has enough gas to meet Serbia’s needs, and that due to proximity, Romanian gas could be cheaper than Russian gas, which has to travel thousands of kilometers and pass through several countries where transit fees are paid.

Serbia is determined to connect to Romania via a gas pipeline, which was formalized in August last year with the signing of a Memorandum of Understanding on the construction of this pipeline.

This is a project that is more than two decades old.

The plan is to connect the Serbian town of Mokrin and the Romanian city of Arad with pipelines over a length of about 100 kilometers. The length on Serbian territory is 13 kilometers, and in Romania 86 kilometers. The Serbian section of the gas pipeline should be completed by 2027.

Minister Đedović Handanović recently stated that the pipeline’s capacity will be between 1.6 and 2.5 billion cubic meters.

The construction of the gas pipeline will cost Serbia around €12 million, as stated when the contract was signed last year.

This is four times more than the price mentioned in 2017, according to the first conceptual design (which envisaged the pipeline being 20 kilometers shorter), and €3 million more than the price from 2019, when the conceptual design was changed.

Oil is harder to secure

By the end of 2027, Serbia could have five gas supply routes (via Hungary, from Romania, via the Turkish Stream, through Bulgaria, and through North Macedonia), but oil will be harder to obtain.

While trying to become independent of Russian gas, Serbia is seeking to further rely on Russian oil.

Before the introduction of U.S. sanctions against Serbia’s Oil Industry (NIS), about 90 percent of the oil Serbia consumed was obtained via the Adriatic Oil Pipeline (JANAF), which connects the Croatian terminal on Krk with the Pančevo refinery.

The oil Serbia received via this route came from various sources: Azerbaijan, Iraq, Norway, Kazakhstan, and others. Previously, it also received Russian oil, until this was halted due to European sanctions.

Currently, deliveries via JANAF have been suspended due to U.S. sanctions on NIS, because of majority Russian ownership, meaning that not a single drop of oil is arriving until the issue of ownership structure is resolved. As an alternative, Serbia is using oil transport by barges via the Danube.

For this reason, the construction of an oil pipeline with Hungary has been announced, which would connect Serbia to the Russian Druzhba oil pipeline, through which oil currently reaches only Hungary and Slovakia among European countries.

The agreement on the construction of the oil pipeline between Hungary and Serbia was signed in June 2023.

The pipeline will run from Novi Sad to the Hungarian town of Algyő. At the signing of the agreement, it was stated that the Serbian section would cost €157 million and that 5.5 million tons of oil would be transported annually through it.

Druzhba is the longest oil pipeline in the world, 4,000 kilometers long, which has been delivering oil from Russia to Europe since 1962. It consists of a northern and a southern branch. The northern branch runs toward Poland and Germany, while the southern branch runs via Ukraine, the Czech Republic, Slovakia, and Hungary.

The expert community in Serbia is divided over the cost-effectiveness and sustainability of building the oil pipeline to Hungary. Some believe that connecting to Druzhba would be unsustainable in the long term due to the age of the pipes and the fact that it passes through war-affected Ukraine, where a single explosion could disrupt the flow.

Others believe that this pipeline has no alternative for Central European countries and that Russian oil will continue to flow through it for a long time, and that its construction is also beneficial for Serbia, as it will provide a new supply source in addition to JANAF. /Danas/