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The Government of the Republic of Serbia

In the service of citizens

Russia to supply Serbia with gas at preferential prices

Belgrade, 27 March 2013

Prime Minister Ivica Dacic attended today the signing of two contracts on the delivery of Russian gas to Serbia until 2021, which will ensure full security of supply to our country and lower gas prices.

Alexey Miller and Vladimir Koldin

The first agreement was signed by the Chairman of the Executive Board of Gazprom Export Alexey Miller and CoE of YugoRosGaz Vladimir Koldin, and the other agreement was signed by Koldin and CeO of Srbijagas Dusan Bajatovic.

Dacic said after the signing of the agreements that cooperation and the greatest degree of understanding in the relations between the Russian Federation and Serbia are the road towards the signing of an agreement on strategic partnership, and announced that on 10-11 April he will make an official visit to Russia. He pointed out that the Russian Federation is the most important foreign policy partner of Serbia, and that the relations and cooperation with Gazprom are vital, considering that these projects are big investments that can improve overall relations between the two countries.

The Prime Minister said that this is the first time Serbia has signed with Gazprom a long-term agreement which will be valid until the end of 2020, while all previous were for a period of one year, adding that the terms of this agreement are the best possible preferential conditions in the world.

Dacic highlighted the importance of the agreements signed earlier with the Russian Federation, where he singled out the contract related to the Oil Industry of Serbia, where the investment volume amounted to €2 billion, while another €3 billion can be expected in the future. He said that the construction of gas processing plants in collaboration with Russia is planned, provision of a stable supply of gas to industrial giants such as the Pancevo Fertilizer Plant or the Petrohemija petrochemicals plant, as well as the possibility of constructing several more underground storages such as the one in Banatski Dvor.

According to him, the interest of Serbia is to have cheaper gas, stable supply, and flexible terms of payment so as to avoid penalties. The realisation of the investment worth €1.7 billion, i.e. the construction of the South Stream gas pipeline, will start next year and or even before, Dacic stated and voiced his hope that this project will be completed by 2016.

He underlined that the section of the South Stream going towards Republika Srpska is important for Serbia, as well as the possibility that domestic companies and equipment be engaged in the construction works. The Prime Minister of Serbia expressed satisfaction with the way in which cooperation with Russia is functioning and a hope that its effects will be beneficial to both states and both peoples.

Miller explained that owing to the long-term contract until 2021, Serbia will receive gas at preferential prices, which are lower by 13% than the previous ones, and the delivery of 1.5 billion cubic meters of gas per year is also envisaged.

He underlined that Serbia is a strategic partner of Russia in the field of energy, which can be seen by many successful projects carried out in the previous period, such as cooperation in the construction of underground gas storage Banatski Dvor, in the Oil Industry of Serbia and on the South Stream.

We also have great plans for the future, the Chairman of the Executive Board of Gazprom stated and added that construction of gas processing plants in Serbia is planned, which will also get gas at preferential prices.

Miller announced that gas will reach Bulgarian coast via the South Stream in December 2015, while gas deliveries to Serbia through that gas pipeline will start in 2016.

Prior to the agreement signing, Dacic and Miller held a bilateral meeting, after which the delegations of the Serbian government and Gazprom spoke about future joint plans and undertakings.

The signing of the agreements was also attended by Russian Ambassador to Serbia Alexander Chepurin and Minister of Natural Resources, Mining and Spatial Planning Milan Bacevic.