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A woman passes by a mural depicting Russian President Vladimir Putin, vandalised with paint, in Belgrade, Serbia, this month. Photo: AP

Russia, Serbia agree 3-year gas supply contract: ‘best terms in Europe’

  • Serbian President Alexsandar Vucic says his nation, an ally of Russia, will pay up to 10 times lower gas rates than most other buyers in Europe
  • Serbia, which has condemned invasion of Ukraine but refused to take part in sanctions against Moscow, is almost wholly reliant on Russian energy

Serbia, which has been trying to tread a delicate balancing act between East and West since Moscow invaded Ukraine, said on Sunday it had secured a new long-term contract with Russia to ensure it has sufficient gas supplies next winter.

As energy prices soar across the globe, the exact terms of the deal, which will ensure Serbia has “a safe winter when it comes to gas supply”, will be announced in the coming days, said President Aleksandar Vucic, after a phone call with Russian President Vladimir Putin.

He insisted the contract would give the Balkan country “by far the best terms in Europe”.

Serbia is currently almost wholly reliant on Russian energy supplies and imports about six million cubic metres of gas daily from Russian giant Gazprom.

Serbian President Aleksandar Vucic. Photo: EPA-EFE

Serbia’s 10-year gas supply contract with Gazprom expires on May 31.

Gazprom’s price for the Balkan country will remain based on an oil formula, resulting in up to 10 times lower gas rates for Serbia compared to most other buyers in Europe, Vucic said. Only Belarus and Armenia are likely to enjoy better terms for Russian gas, he said.

Moscow also owns a majority stake in Serbia’s oil and gas company, NIS.

The deal comes at a time when the European Union is trying to reduce its dependence on Russia for energy following Moscow’s invasion of Ukraine, and is expected to discuss a possible embargo on Russian oil at an emergency summit on Monday.

Vucic also said that he had discussed with Putin the possible expansion of gas storage facilities in Serbia.

Workers on a gas pipeline in Serbia; it plans to replace some of its gas imports from Russia with other sources once a new pipe to Bulgaria is completed next year, according to Serbian Energy Minister Zorana Mihajlovic. Photo: Bloomberg

While Belgrade has condemned the Russian invasion of Ukraine at the United Nations, it has refused to take part in sanctions against Moscow.

“Putin said to call him if I feel there is anything more to be discussed,” said Vucic, Russia’s closest ally in Europe.

Serbia, which aims to join the European Union, has come under pressure recently from Western countries to align its foreign policy with the bloc and impose sanctions on Russia.

Additional reporting by Reuters, Bloomberg