Announcing last week’s meeting of the Ministerial Council of the Energy Community on Thursday, December 17, Janez Kopac, director of the EC Secretariat, listed in an interview with the Beta agency the violations that, in his opinion, were committed by Serbia in the gas (energy) sector. However, those objections were not on the agenda of the Council of Ministers, and the Energy of the Balkans asked the Ministry of Mining and Energy (MRE) for a comment and Serbia’s position on these issues.
One of the main objections, which Kopac has been persistently repeating for almost two years, although the Secretariat of the Energy Community submitted a substantially positive Opinion on the Decision of the Energy Agency of the Republic of Serbia (AERS) on the exemption of the new natural gas interconnector on February 5, 2019 main gas pipeline from the border with Bulgaria to the border with Hungary, as part of the Serbian gas transportation system from the rules of the third energy package.
AERS is an independent regulatory body in the Republic of Serbia
Now that pipeline is finished, it is connected to the Bulgarian gas transport system, which the Bulgarians call the Balkan Stream, and which will transport gas from the Turkish Stream to Serbia, and when the Hungarians complete their interconnection in the Ministry of Mining and Energy (MRE) of Serbia, we sought an answer to the question: Has the ministerial meeting resolved the issue of subsequent objections of the Energy Community to the AERS decision on the partial exclusion from the third energy package of the project for the construction of the main gas pipeline from the Bulgarian to the Hungarian border?
“AERS has carefully considered all the objections of the Secretariat of the Energy Community (SEnZ) to the decision to exclude the new interconnector and accepted a large number of objections, which is in accordance with the Law on Energy. As you know, AERS is not obliged to fully harmonize its opinion with the given remarks, bearing in mind that AERS is an independent regulatory body in the Republic of Serbia. When the final decision of AERS deviates from the opinion of the competent body in accordance with the obligations arising from ratified international agreements, AERS is obliged to publish, together with its decision, the explanation on which it bases its decision, which it has done. What we can certainly say is that everything will be done to resolve all issues in order for this gas pipeline to function smoothly,” they say in MRE.
Opening the Hungarian route for competition
The director of the EC Secretariat also said that Srbijagas was blocking access to competition on the gas pipeline that connects the Serbian transmission gas system to the Hungarian code of Horgos.
In yesterday’s conversation with the representatives of the main contractor on the Balkan Stream project, the Russian company IDC, about the final works on the construction of this gas pipeline, the Deputy Prime Minister of the Republic of Serbia and the Minister of Mining and Energy, Prof. Dr. Zorana Mihajlovic said that “with the construction of the Balkan Stream gas pipeline, Serbia gained another direction of gas supply, and thus increases its energy security.” The ministry has been actively involved and is helping to resolve all remaining issues so that everything is ready for the pipeline to become operational by the end of the year.”
Answering the question of Balkan Energy about opening the Hungarian supply route for others in the relevant ministry, they say that the position of the “Ministry of Mining and Energy is that this point must be opened as soon as possible, in order to allow unhindered third party access to the natural gas transport system.” The Government of the Republic of Serbia, at the proposal of MRE, passed a conclusion on the reorganization of the Public Company Srbijagas, Novi Sad, which obliges JP Srbijagas to enable functional separation of Transportgas Srbija doo, as well as for Transportgas Srbija doo to install metering systems at the remaining exits from the transport system public calls for capacity lease, in order to open this point before the start of the new gas year.”
Reorganization of Srbijagas
One of the objections that the EC insists on, and Kopac threatens with fines and lawsuits to the European Commission, is the separation of activities in JP Srbijagas. Although the topic was not on the agenda of last week’s Council of Ministers, the Ministry of Mining and Energy then announced concrete steps facing the working group for the reform of Srbijagas.
“By the decision of the Deputy Prime Minister and the Minister of Mining and Energy, the Working Group of the Ministry was formed to monitor the implementation of the Government’s conclusion on the reorganization of the Public Company Srbijagas Novi Sad. The working group will, within its competencies, supervise the implementation of activities defined by this conclusion and provide all necessary assistance in order to implement this conclusion within the deadlines and start the work of transmission system operators and distribution system operators in full compliance with the Energy Law. The bearers of a large number of activities envisaged by the conclusion are precisely the companies that need to create the conditions to start operational work, namely JP Srbijagas, Transportgas Srbija and Distribucijagas Srbija. Some of the activities necessary for operational operations have already been done during the previous period, but this was not enough to enable a functional, and not only legal separation of JP Transportgas Srbija doo and Distribucijagas Srbija doo. Also, one of the problems that needs to be solved through the process of reorganization of Srbijagas is obtaining a license for the companies Transportgas Srbija and Distribucijagas Srbija, because these companies currently do not have a license for the activities they perform,” said written answers submitted to Balkan Energy. ‘’First of all, it is necessary to transfer the property, ie the transport system for natural gas from JP Srbijagas Novi Sad to Transportgas Srbija doo Novi Sad and the system for distribution of natural gas to Distribucijugas Srbija d.o.o., in order to enable the certification of the transmission system operator, and then the licensing of both companies.”
Distribucijugas Srbija d.o.o., currently has no employees, ie they must be transferred to that company as part of this reform, they say in MRE.
“The solution of property and legal issues has been done since the adoption of the Law on Energy in 2014, but now it is necessary to approach the completion of this work more seriously and carry out all the necessary activities with the competent authorities. In addition, it is necessary to ensure that these companies have employees, financial, material and technical resources necessary to perform the activities of transport and management of the transport system, as well as distribution and management of the distribution system, to ensure the distinction of business identity, information protection, etc., noting that “through the process of reorganization, a transparent business of Srbijagas should be obtained, so that the company operates more efficiently and profitably. It is also important to analyze all the projects that Srbijagas is implementing, their justification, and to speed up some key projects, especially when we talk about the need for much faster gasification of Serbia.”
Jugorosgas certification
Commenting on Janez Kopac’s remarks on the issue of certification of Jugorosgas from MRE, they say: “In our opinion, the issue related to Jugorosgaz has been resolved in the part where the discrepancy with the provisions of the Energy Law from 2014 was recognized by the Energy Agency of the Republic of Serbia (AERS), as well as by the Energy Community Secretariat. Namely, Jugorosgaz, in accordance with the provisions of the Law on Energy, which was passed before 2014, and which transposed the so-called the second energy package of directives, set aside its subsidiary Jugorosgaz Transport and is licensed to perform transport activities and transport system management. By passing the new Law on Energy, which transposed the so-called directives of the third energy package, Jugorosgaz had the obligation to be certified and licensed, in accordance with the new provisions. Jugorosgaz Transport has submitted a request to AERS for certification, which is a prerequisite for licensing, according to the so-called ISO model. The certification it received was conditional, ie some additional conditions had to be met, within a limited time. Bearing in mind that these conditions were not met, primarily due to objective circumstances and the manner in which Jugorosgaz ad was established, AERS revoked the certificate of Jugorosgaz Transport. In the meantime, Jugorosgaz ad as the founder of Jugorosgaz Transport, as well as Jugorosgaz Transport itself, have undertaken a number of activities to create conditions for certification under the so-called ITO model, which implies ownership of the transport system.”
The Ministry of Mining and Energy also announces that it will “provide all possible assistance within its competence and initiate the amendment of the Agreement with the Russian Federation, which will enable the transfer of the transport system from Jugorosgaz ad to Jugorosgaz Tansport, Energija Balkana reports.
