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Serbia in talks with Gazprom over new pipeline

Alexei Miller, who chairs the Management Committee of Russia’s single largest oil and gas company, Gazprom, arrived in Belgrade on Tuesday to meet Serbian leaders.

Miller will meet President Boris Tadic, Prime Minister Vojislav Kostunica and other key officials, Tadic’s spokeswoman, Jasmina Stojanov, said by phone. She refused to speculate about the topics of the talks, and announced an official statement would be issued once they have been concluded. However, Aleksandar Popovic, Serbia’s Minister for Mining and Energy, said that the talks with Miller would focus on persuading Gazprom to build a major gas pipeline through Serbia instead of Romania. “We are doing everything possible to convince Gazprom that constructing a pipeline across Serbia, where it will follow rivers and flat lands, will be cheaper than building it across the Carpathian mountains in Romania”, Popovic told Belgrade’s B92 TV. Popovic also said he expected Serbia’s leaders and Miller to review “the interest of Gazprom’s subsidiary, Gazpromneft, in a future bid for the privatization of Serbia’s oil industry, NIS.”

Last year the Serbian government announced it wanted to launch a phased privatization of the NIS, and to offer an initial 25% stake to a strategic partner. Serbia imports most of its natural gas from Russia. Last year it signed a non-binding agreement with Gazprom on the development of a 400-kilometer pipeline, a part of the so-called Blue Stream project, that would link Serbia with neighboring Bulgaria and Croatia. The pipeline would have an annual capacity of 20 billion cubic meters of gas, and the value of the investment was estimated at some €1.2 billion ($1.68 billion). Popovic said that Serbia had a “keen interest in the pipeline,” as it would “make us a transit country, and we will get revenues from it.” Gazprom, which controls some 17% of the world’s known reserves of natural gas, is exporting its output to European markets through Ukraine and Belarus. The company’s strategists have previously said that the Blue Stream pipeline will make it easier for its natural gas to reach parts if Italy, France and Austria. (