Russia, Serbia sign agreement on Russian gas supplies until 2021

Russia and Serbia have signed an intergovernmental agreement on Russian gas supplies until the end of 2012, Russian Deputy Energy Minister Anton Inyutsin told Interfax.

"This agreement envisages a guarantee of Russian gas supplies to Serbia over the course of ten years," he said.

Russian Energy Minister Alexander Novak and Serbian Energy, Development and Environmental Protection Minister Zorana Mihajlovic signed the agreement.

The Russian government approved the draft document this August, but the signing was delayed due to several demands from the Serbian side regarding an increase in oil amounts and preferences on prices.

At the moment, gas is delivered along a chain to Serbia: Gazprom export to Yugorosgaz (a joint venture between Gazprom, SerbiaGas and Centrex) to SerbiaGas.

This agreement was necessary for the signing of a long-term gas supply contract with Serbian state-owned company SerbiaGas, which was complicated after the country adopted a new energy law.

According to the draft agreement, Gazprom and/or another organization authorized by Gazprom would act as the seller, and SerbiaGas and other organizations authorized by Serbia and approved by Gazprom will act as the buyer. The document is valid until December 31, 2012, after which it will automatically be prolonged by five years.

Russia can supply Serbia with no more than 5 billion cubic meters (bcm) of gas a year, the agreement says. Last year, Gazprom sent 1.4 bcm of gas to the country.

A protocol of Serbia's debt repayment for gas it received from November 2000 to January 2001 has been attached to the agreement. Serbia promises to pay back $30 million by the end of 2014 - $10 million in 2012, $10 million in 2013 and $10 million in 2014.

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