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Serbia's gas supply halted, situation critical

Serbian imports from Russia's gas monopoly were cut off on Tuesday, a situation which could force industrial consumers and households in the Balkan country to find an alternative.

“The situation is critical,” Dusan Bajatovic of Srbijagas said. “Gas imports from Russia are completely halted.”

Serbia imports 92% of its 2.4 billion cubic meters of natural gas annually from Russia via Hungary and Ukraine. Eight% comes from domestic sources.

“Major industrial consumers are going to be the most affected by this crisis, they didn't have time to look for alternative fuels,” Bajatovic said.

The Serbian government held a special session on Tuesday to discuss the problem and was set to announce measures.

Schools, plants and almost all stores will be closed on Wednesday in observance of Orthodox Christmas. Transport of others fuels, especially around a holiday week when many are not working, could present logistical difficulties.

Serbia has natural gas reserves of 100 million cubic meters, which could last for about 10 days under normal daily consumption of nine to 10 cubic meters.

Natural gas accounts for 15% of Serbia's fuel use and the domestic production of one million cubic meters is barely enough to maintain the pipeline system.

Major industrial consumers are expected to switch to fuel oil and households to electricity, which could also put a strain on the power supply system.

In December, Serbia signed an energy pact with Russia which will see Serbia included in the South Stream pipeline, Gazprom's €10 billion ($13.93 billion) joint project with Italy's ENI to deliver Siberian gas under the Black Sea to southern Europe.

A natural gas storage facility in north Serbia is also to be built under the deal. (Reuters)