In the last decade of XX century, the energy industry of Serbia has, together with agriculture, carried the heaviest burden in sustaining the economy and society during the period of sanctions and economic embargo. Being a key branch of the infrastructure, in the former SFRY, it was optimized at the state level, so that the effects of the separation of former republics have first affected the energy industry, even before the start of economic embargo. Due to the embargo, the energy consumption was mostly adjusted to limitations of local production, amounting to 60% of normal consumption. The lack of energy resources coming from import and economic embargo are the reasons why domestic production was forced to maintain high level of output in order to enable functioning of both priority consumers and vital segments of the society, satisfy heating requirements as well as other needs of population. Whereas the terms of exploitation and maintenance of energy system have drastically worsened, electricity consumption structure has changed significantly, local energy prices dropped off to very low (social) level, economic position deteriorated, connections with abroad were cut and possibilities for import and export activities were reduced, while development and realization of plans for the construction and revitalization of the existing capacities practically ceased to exist due to the lack of heavy fuel oil, lubricants, spare parts, raw materials, etc. posing a threat to reliable operation of all production capacities, etc. High import dependence of the oil and gas industry resulted in the change of energy consumption structure in our country since to some extent natural gas was replaced by domestic, more expensive, in terms of energy, electricity, whereby total energy efficiency of the country further declined , lot of energy capacities were substituted and a part of the market lost /2/.
Serbia has produced natural gas domestically since 1952, but has always been net importer. Gas utilization in Serbia has started half century ago. Transport of gas quantities on the territory of Vojvodina has begun in 1952, from gas field Velika Greda to the city of Vršac. More significant transport activities and larger production and consumption of gas, have started in 1963, with the construction of the main gas pipeline Kikinda – Elemir – Čoka – Jermenovci – Pančevo comprising, together with the gas pipeline Elemir – Gospođinci – Novi Sad – Beočin, the backbone of the regional gas pipeline system. At the end of the year 1975, the gas pipeline system was 465 km long with diameter from 4″ to 12″/ 5/
The program of introducing gas pipeline into Eastern part of SFRY, approved in the year 1973, enabled the import of natural gas from SSSR in 1978 as well as intensive development of gas pipeline system of Serbia. Natural gas is imported from Russia via the Ukraine and Hungary. The transportation and distribution of natural gas is carried out by ex NIS-Gas (essentially in the Vojvodina region only) and ex Energogas (in the region south of the Danube), now all together in Public Enterprise ”Srbijagas” .The backbone of the gas pipeline system consisted of the main gas pipeline Horgoš – Gospođinci – Batajnica – Velika Plana – Paraćin – Pojate – Kruševac with a large loop comprising: main gas pipeline Senta – Mokrin – Elemir – Pančevo – Smederevo – main gas pipeline (Velika Plana), with branches Gospođinci – Novi Sad – Beočin, Gospođinci – Elemir – Banatski dvor, Batajnica – Šabac – Loznica – Zvornik, Batajnica – Pančevo, Batočina – Kragujevac – Kraljevo and Bresnica – Čačak – Gornji Milanovac(fig.1). The gas pipeline system connects all gas fields in Vojvodina with consumers, enables gas import from Russia through Hungary and transit of gas for Bosnia and Herzcegovina. The total length of gas transmission pipelines in Serbia is 2,160 km, including 1,650 km owned by ex NIS-Gas and 510 km owned by ex Energogas Main gas pipeline for transport of natural gas via Hungary has the capacity of 6.1 bilion m3 on annual basis, 5.340 milion m3 of which is transported to territory covered by the current PE ”Srbijagas” while the remaining 760 milion m3 is transited to Bosnia and Hercegovina/5/.
Gas consumption on the territory of Serbia showed tendency for continuous growth until 1989 when the greatest consumption was reached, and since than it was declining and rising in turn. Total consumption of gaseous fuels (natural gas) in 1990 amounted to 2.75 bilion m3 (bcm), i.e. 2.38 mil toe. The share of gaseous fuels in total consumption was equal to 13% , i.e. 17% in final energy consumption. Domestic production of natural gas that year covered 23% of total consumption of gaseous fuels and its share in local production of primary energy was about 5%. Stagnation i.e. decline in consumption took place in the period from 1990 to 2000 as a result of sanctions and blocade, so that minimum consumption equal to 1.088 bcm was acchieved in 1993, and since than it was gradually rising but has not exceeded the one from 1990 so far/4/.
Basic characteristic of natural gas market on the entire territory of the Republic of Serbia is that the demand always exceeds domestic production of natural gas. Lacking quantities of natural gas were covered by gas imported from Russia. (Table 1) High dependance on import in natural gas consumption is attributed to scarce domestic resources and insufficient level of research. However owing to its potencials, availability, environmental and economic advantages natural gas represents optimal substitute to crude oil, which should result in sharp growth of its consumption. It is of particular importance to substitute electricity used for heating with the gas as much more appropriate fuel for this application.
THE DEVELOPMENT OF GAS INDUSTRY IN SERBIA IN THE PERIOD UP TO 2015.YEAR
Projections of energy needs of the Republic of Serbia by 2015 /3/ have been determined in order to harmonize the existing structure of the final energy in the appropriate consumption sectors with the production capabilities of energy sources, according to the criteria of economical use and increase in the energy use efficiency. This is why the approach of the determination of the energy needs in the period by 2015 takes into account not only the macroeconomic assumptions and economic development parameters, but also a target-determined change in economic effectiveness and economical energy use as well as the increase in energy efficiency in the energy production and utilization; in a word, it takes into account the effects of planned measures in the conducting of the new Energy Policy in Serbia.
The expected natural gas consumption would have reached the most dynamic growth rate on the basis of its being substitute for other energy fuels. Considering the state of research and the existing capacities, production capacities as well as limitations in terms of more significant investments in the period to come, domestic production of primary energy will have relatively low growth rates, so that the share of energy comming from imports is expected to be bigger than the present one.
In the exploration and production of the gas, transport and distribution of the natural gas , the attention is drawn to/4/ :
- the necessity for conducting the new research works inland and abroad by concessions,
- there is dependence on a single gas supplier, which is not offering necessary reliability of supply, and results in the necessity for connecting to various suppliers, for the purpose of providing at least one additional supplier of gas sourcing from import,
- in addition to this, it is necessary to provide prerequisites for the completion of the construction of the first underground storage facility for natural gas in Banatski Dvor the capacity of which is 800 million m3.
Future domestic production will be affected by natural fall of production sourcing from gas wells which are currently being exploited. In order to retain and possibly increase the level of self-reliance in gaseous fuels it is necessary to intensify research works in the country and abroad as well as to make connections by means of concessions, based on long term arrangements in the country or abroad. Gas production abroad, by means of concessions, is most likely to be realized on the territory of former Soviet Republics, especially Russia, where, in addition to favourable market, the technological connection (gas pipelines) exists.
Natural gas consumption projection is based on the following assumptions:
- The possibilities for supplying energy for most of final consumption, except for the electricity, are limited;
- Natural gas is a fuel with very favourable technological, energy and environmental characteristics and, from the aspect of potential energy which can be obtained by its combustion, its use for the requirements of high temperature proceses is beneficial and justified.
- That, globally considered, natural gas is more abundant and low cost resource compared to oil.
- Natural gas is the closest substitute for electricity in households and introducing gas into households is a way of improved use of gas pipeline infrastructure, and
- In the starting year 2000, the gas consumption was reduced, due to interruptions in gas supply from import, which particularly affected the volume of consumption in the industrial sector, both for energy purposes and non-energy purposes.
As regards the structure of energy products in the final energy, the predominance of liquid fossil fuels would still be maintained, with a tendency of reducing its share (from over 37% to less than 35% in 2015), a significant increase in the share of natural gas (from 20 to 24 %) and a gradual decrease in the power share (from 29.5% to 28%)
Natural gas in Republic Serbia is expected to be the primary substitute for electricity based heating either through district heating in densely populated areas or individual boilers in the rest of the country.An increase in the share of natural gas energy is the strategic option and the consumption should increase at the highest rate as the result of substitution of other fuels and increased demand. Extension of the gas networks is extremely important for Serbia’s overall energy and environment strategy and should preferably be undertaken by private investors.
The natural gas is the chance for Republic of Serbia for sustainable development and with its intensive consumption in XXI century to conciliate 4 E (Energy, Economy, Efficiency and Environment).
