UPI Energy Watch

Russia, Serbia to create venture for pipeline

Gazprom said it would set up a joint venture jointly with Serbia's state company Srbijagas to construct a gas pipeline through Serbia's territory.

Both companies signed an agreement on Monday as part of Russian First Deputy Prime Minister Dmitry Medvedev's brief visit to Serbia.

Under the agreement, the two sides agreed to set up a joint venture for preparing a feasibility study, building and putting into operation the gas pipeline through Serbia's territory, according to a news release issued by Gazprom on the results of the Russian-Serbian talks in Belgrade.

"At least 10 billion cubic meters of natural gas will be run through the pipeline within the South Stream gas pipeline system," the release says.

A founding committee and a joint working group will be set up in order to prepare documents for creating the company. They will be effective until the joint venture is founded, the release says.

Serbia, Croatia, Italy, Romania to build oil pipeline

Officials from Serbia, Croatia, Italy and Romania agreed in Brussels to set up a joint venture to construct a pan-European oil pipeline.

The Croatian side will assume the responsibility of project coordinator, and all preparations for setting up the joint company of the four countries of the region will be made over the next month.

Serbia is represented by Transnafta in the joint company, which will be based in London, which Italy explicitly demanded.

According to RIA Novosti, the three sides sought to construct a pan-European oil pipeline as an alternative transport route to ensure the region's safer and cheaper supply of crude from the Caspian region.

The proposed pipeline would directly connect Caspian and Russian oil to the western route, which is already in place.

The existing segments of the Adriatic oil pipeline from Novi Sad to Omis can be used for transporting crude, so that investment can be considerably reduced.

According to RIA Novosti, the most realistic estimate is for the oil pipeline to have a capacity of 60 million tons, which would require about $2.2 billion. Alternative routes to the Mediterranean, further to the south, would not have the advantage of a link to the transalpine oil pipeline.

Russia, Hungry agree to set up venture

Russia and Hungary have agreed to set up a joint venture to build a section of the South Stream gas pipeline on the territory of Hungary.

Russian First Deputy Prime Minister Dmitry Medvedev and Hungarian Prime Minister Ferenc Gyurcsany held talks on Monday to discuss details of the venture.

Medvedev said: "We succeeded in reaching agreement under which the gas pipeline's section will be guild by a joint venture, which will be set up on the principles of parity (50 percent of Russia and 50 percent of Hungary)."

"Hungary will be represented by a company, which has 100 percent of state ownership."

Medvedev added: "Russia will be represented by Gazprom.

"The joint venture will be registered on the base of Hungary's law," Gyurcsany said. "We'll seek to make expenses stable during the whole period of its existence." The prime minister said, "The Hungarian government will guarantee that it will carry out its obligations."

Medvedev said: "We'll create the company on Hungary's law. We'll exert maximum effort to provide most favorable treatment and favorable tax regime to the project."

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Closing oil prices, Feb. 26, 3 p.m. London

Brent crude oil: $97.78

West Texas Intermediate crude oil: $99.08

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