Serbia eyes 'step forward' in strategic gas partnership with Azerbaijan

Serbia is looking to take a "step forward" in its strategic partnership on gas supply with Azerbaijan through the construction of a gas-fired power plant near the city of Nis, the Serbian energy ministry said Dec. 17.

Serbia began receiving gas from Azerbaijan earlier this year under a deal signed in November 2023 for the supply of up to 400 million cu m in 2024 with annual deliveries to continue at that level through 2026.

Belgrade has said it hopes to be able to triple imports from Azerbaijan from 2027, with Baku also having pointed to the potential to supply 1 Bcm/year.

Serbia's energy minister Dubravka Dedovic Handanovic met with a delegation from Azerbaijan's state-owned Socar Dec. 17 for talks on cooperation regarding the construction of the gas-fired power plant at Nis.

"This project is important both from the perspective of providing baseload energy and greater security of supply, but also as a step forward in the strategic partnership between our two countries in gas supply," Dedovic Handanovic said.

Dedovic Handanovic said she expected a memorandum of understanding with the Azerbaijani side on cooperation on the power plant project to be signed "soon."

"The construction of a gas power plant near Nis has been recognized in the new energy development strategy as one of the priority projects," she said.

The plant was also one of the topics discussed at recent meetings between Serbian President Aleksandar Vucic and his counterpart from Azerbaijan, Ilham Aliyev, the ministry said.

Dedovic Handanovic said the next steps on the joint project would be defined through dialogue between the ministry and energy companies EPS, Srbijagas and Socar.

Gas from Azerbaijan is supplied via Bulgaria, transited through the 1.8-Bcm/year capacity Bulgaria-Serbia interconnector that started operations in December 2023.

Azerbaijan also expanded its gas sales agreement with Serbia in September, adding a further 1 million cu m/d of supply between November 2024 and April 2025.

Socar diversification

Socar continues to diversify its export markets in Europe and this month began gas supplies to Slovakia's SPP under a short-term pilot contract.

Socar said Dec. 2 that the two companies also aimed to develop a "longer-term" energy partnership.

"Together with Turkey, Georgia, Italy, Greece, Bulgaria, Romania, Hungary, Serbia, Slovenia, Croatia and North Macedonia, Slovakia became the twelfth country to receive Azerbaijani gas," Socar said.

SPP announced the pilot agreement on Nov. 13, saying it was part of efforts to prepare for the potential loss of Russian imports via Ukraine.

SPP said that if the collaboration turned out to be successful it would consider concluding a gas supply contract with Socar for a longer period as well.

Azerbaijan's gas exports to Europe -- not including Turkey and Georgia -- totaled 11.8 Bcm in 2023 and are expected to reach some 13 Bcm this year.