November 12 (SeeNews) - Serbian state-owned gas monopoly Srbijagas is expecting to get a loan from Gazprom in the first quarter of 2014 to fund works on the local section of the South Stream gas pipeline, Srbijagas director general Dusan Bajatovic said.
In November 2009, the South Stream Serbia AG joint project company was registered with Gazprom holding 51% and Srbijagas controlling 49%. In October 2012 a final investment decision was approved for the South Stream project in Serbia.
In early March, South Stream Serbia AG should have at its disposal some 500 million euro ($669 million) for the start of the pipeline's construction, Bajatovic said in an audio file posted on the website of state-run broadcaster RTS on Tuesday.
According to other local media, Bajatovic has said that the amount of the loan that Srbijagas is eyeing from Gazprom stands at 175 million euro and that the move would mirror the funding pledged by the Russian company for the construction of the South Stream section in Bulgaria.
Last month, Bulgaria and Gazprom launched the construction works on Bulgarian territory and announced that the 540 kilometre section there will be financed with a 620 million euro loan which Gazprom will provide to the state-run Bulgarian Energy Holding.
Bajatovic also said that further funding for the project will come in the form of a 75 million euro loan that should get guarantees from the Serbian government, while Gazprom will provide as much through a recapitalisation of South Stream Serbia AG.
The government in Belgrade should now approve the guarantees at an upcoming cabinet meeting after which the country's parliament will also have to give its go-ahead, Bajatovic said.
The remaining funds for the project will be secured through project financing from commercial lenders, mostly Russian, the official added.
On Monday, the government in Belgrade said that the construction of the Serbian section of the South Stream pipeline is set to formally get underway on November 24
The 1.7 billion euro Serbian section will ultimately have an annual capacity of 40.5 billion cubic metres of gas while stretching for 422.4 kilometres. The initial plans involve building a 52.8 km spur to Croatia and a 105.8 km offshoot to Bosnia's Serb Republic, as well as possible branches towards Macedonia and Montenegro.
The Gazprom-spearheaded South Stream aims to diversify gas routes within the European Union and to provide stable gas supplies from Russia to Central and Southern Europe. Intergovernmental agreements have been signed with Bulgaria, Serbia, Hungary, Greece, Slovenia and Croatia in order to implement the onshore gas pipeline section.
($=0.7469 euro)
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