U.S. AG Equipment Co To Deliver $7.5 Mln Aggregate for Serbia's Banatski Dvor Gas Storage

Srbijagas also said it has signed a 2.1 million euro agreement with Vienna-based Integral Montage, active in pipeline construction, industrial assemblies, plant construction, and engineering, for the assembly of a new production line at Banatski Dvor supplied by Austrian group Heat.

The 5.5 million euro contract with Heat was signed in April as part of the planned upgrade of Banatski Dvor.

The assembly of the new production line should begin over the next few days and should be completed by the end of December, Srbijagas CEO Dusan Bajatovic said in a statement posted on the company's website late on Monday.

The 3.5 megawatt aggregate has a daily capacity of 1.7 million cubic metres (cu m), Srbijagas said in the statement, adding that the deadline for the delivery of the equipment is 200 days.

The upgraded gas storage facility, located in northern Serbia, is expected to pump out up to five million cu m daily. Banatski Dvor reserves can be increased by up to 1.0 million cu m per day but outgoing shipments currently cannot exceed 500,000 cu m as it is pending the completion of the new production line.

Russia’s Gazprom and Srbijagas agreed last month to set up a joint venture that will build the Serbian section of the South Stream gas pipeline and another project company that will expand the underground gas storage facility.

"We decided to acquire the compressor even before deciding to set up a joint venture with the Russian partner for Banatski Dvor," Bajatovic said in Monday's statement.

Gazprom will later reimburse Srbijagas for the equipment costs, Bajatovic also said in the statement.

South Stream Serbia AG is expected to be incorporated in November with the aim to design, build and operate the Serbian section of the South Stream pipeline that will carry Russian gas to western Europe under the Black Sea. Gazprom will hold a 51% stake in the joint venture, while Srbijagas will own the remainder.

Gazprom committed to the expansion of the gas storage facility as part of a deal in which it acquired 51% of Serbian oil monopoly NIS  for 400 million euro in February.

($=0.6662 euro)