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Gazprom makes Serbia a transit country for Russian gas supplies

OAO Gazprom, Russia's natural-gas export monopoly, agreed to help turn Serbia into a transit country for Russian gas deliveries to Europe.

Gazprom Deputy CE Alexander Medvedev signed a memorandum of understanding with Serbian Mining and Energy Minister Radomir Naumov in Belgrade today, Gazprom said in an e-mailed statement. Gazprom is seeking to diversify transit routes to Europe, which receives a quarter of its gas needs from Russia. Gazprom plans to build a pipeline under the Baltic Sea directly to Germany, bypassing Belarus and Ukraine. The company is also studying the possibility of extending its Blue Stream pipeline to Turkey into the Balkans. Gazprom and its Serbian partners will study the possibility of increasing the capacity of Serbia's gas pipelines, the company said. The project involves building a 400-kilometer (240-miles) pipeline that would link Serbia with neighboring Bulgaria and Croatia and continue on to consumers in central and western Europe, the Serbian ministry said in a statement yesterday. The pipeline would have an annual capacity of 20 billion cubic meters of gas, or nearly 10 times the country's current needs. Serbia's partner in the venture will be the state-run gas company Srbijagas. The project is estimated to cost €1 billion ($1.3 billion) with construction starting as early as next year, the ministry said. (Bloomberg)