Russia’s Gazprombank To Enter Serbia Through Acquisition or JV

Jun 9, 2009 12:42 CET

SeeNewsStory - The Corporate Wire

BELGRADE (Serbia), June 9 (SeeNews) – Russia’s Gazprombank is preparing to enter the Serbian market by buying an existing bank or setting up a new one jointly with local gas monopoly Srbijagas, Belgrade-based Danas daily reported on Tuesday. A meeting will be held next week with the chairman of Gazprombank’s management board, Andrey Akimov, to discuss the options, which the bank has at its disposal to enter the Serbian market, Danas quoted the head of Srbijagas, Dusan Bajatovic, as saying. The Russians are ready to raise the capital of a majority-owned Serbian bank by 100 million euro ($139 million) and the possibility for setting up a joint Srbijagas-Gazprom bank is also being considered, Bajatovic said. Under a bigger energy deal with the government in Belgrade, Gazprom paid 400 million euro for a 51% stake in Serbia’s oil monopoly NIS in February and pledged to invest a further 547 million euro in NIS by 2012. Gazprom agreed to upgrade the Banatski Dvor underground gas depot in Serbia as part of the same deal. Bajatovic said that Srbijagas and Gazprom will set up a joint venture on Banatski Dvor by the end of June and pumping gas into the storage should start by July 1, Danas reported. “Due to potential danger of a crisis in gas supplies via Ukraine, it is important that Banatski Dvor started delivering five million cubic metres of gas a day as soon as possible. We are holding talks with Hungary on renting space in gas storage facilities in order to secure stable supply to Serbia in case of crisis,” Bajatovic said. In April, Srbijagas signed a 5.5 million euro contract with Austrian company Heat for a new production line at Banatski Dvor. After the upgrade, due for completion in November, the storage facility is expected to pump out up to five million cu m daily. Banatski Dvor reserves can be increased by up to 1.0 million cu m per day but outgoing shipments currently cannot exceed 500,000 cu m as it is pending the completion of the new production line. A January price row between Kiev and Moscow left Serbia and its neighbours in southeastern and central Europe struggling for gas supplies for nearly two weeks amid sub-zero temperatures. The energy deal between Serbia and Russia also calls for Gazpom to build the Serbian part of the South Stream pipeline, a 10 billion euro joint project of Gazprom and Italy's ENI designed to pump Russian gas to Austria and Italy under the Black and Adriatic seas. A technical team for the preparation of the final version of the South Stream feasibility study will be formed this week, Danas quoted Bajatovic as saying. He said in May that Serbia’s section of the future pipeline is expected to carry no fewer than 20 bcm of gas annually. “The establishing of a joint venture [on South Stream Serbian section] is underway and will be completed soon,” Danas quoted Bajatovic as saying. Danas also quoted the Russian ambassador to Belgrade, Alexander Konuzin, as saying that Russia is considering Serbia’s request of a billion euro financial help, which Serbia’s President Boris Tadic has asked its Russian counterpart Dmitriy Medvedev for. According to Konuzin, 200 million euro of the loan will be used to support Serbia's government budget, 400 million euro will be spent on infrastructure projects and a further 400 million will finance the construction of the Belgrade underground railway system. Konuzin and Bajatovic met on Monday to discuss the cooperation between the state-owned gas companies of Serbia and Russia. ($=0.7174 euro)