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Serbia and Azerbaijan are rapidly developing a friendly and strategic partnership

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Serbia—heavily dependent on Russian natural gas—seeks to strengthen energy ties with Azerbaijan. Belgrade is hoping to start importing not only gas from the Caucasus nation, but also electricity. At the same time, Baku aims to develop economic and military cooperation with the Balkan country. But how realistic are such ambitious plans?

The southeastern European country is building a gas interconnector connecting the existing Serbian network in the city of Nis with the Bulgarian network in the capital Sofia, stretching for 109 kilometers (67 miles) on the Serbian side. Once completed, presumably by the end of 2023, Serbia might be in a position to start diversifying its gas supply sources. Presently, the Balkan nation is 100% dependent on Russian gas, which puts Serbia in a very difficult position if the Kremlin, for whatever reason, eventually decides to completely halt gas supplies to Europe.

In order to prevent such an outcome, on 1 June 2022 Serbia signed an agreement on energy cooperation with Azerbaijan—a country that has 1.3 trillion cubic meters of proven natural gas reserves. Belgrade aims to connect to the Southern Gas Corridor through the Greece-Bulgaria Interconnector (IGB), which is why Serbian President Aleksandar Vucic attended the IGB gas pipeline opening ceremony on 11 October 2022. A month and a half later, the Serbian leader hosted Azerbaijani President Ilham Aliyev in Belgrade, and the two nations’ energy ministers discussed the intensification of bilateral cooperation. More importantly, Vucic and Aliyev agreed to form the Strategic Partnership Council in an attempt to additionally strengthen bilateral ties between the two countries.

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Even though Azerbaijan is an ally and a strategic partner of Turkey—a country that has recognized unilaterally declared independence of Serbia’s breakaway province of Kosovo in 2008—Baku firmly supports Serbia’s territorial integrity, and sees Kosovo as part of Serbia.

“The sovereignty and territorial integrity of our countries are supported on a reciprocal basis, and this position is unequivocal, unchanging and will remain so,” said Aliyev in Belgrade on 23 November 2022.

Following Azerbaijani’s 2008 decision to not recognize Kosovo, diplomatic relations between Belgrade and Baku have quickly developed. Serbia has repeatedly reaffirmed its support for Azerbaijan’s sovereignty and territorial integrity, even though, during the 2020 war between Armenia and Azerbaijan over the Nagorno-Karabakh region, the Balkan country sold weapons to both sides. Vucic later reportedly described his country’s military ties with Azerbaijan’s archenemy as a “wrong decision.” Now that Belgrade seeks to increase energy cooperation with Baku, Serbia is unlikely to sign any defense deals with Armenia, even though Yerevan also never recognized Kosovo. Instead, Belgrade is expected to intensify its military cooperation with Baku, given that the two countries’ defense ministers signed a deal on military technical cooperation in October 2021. It is, therefore, not surprising that Aliyev emphasized that Azerbaijan and Serbia will “take additional steps to deepen and widen their military ties,” pointing out that the energy-rich Caucasus nation intends to strengthen cooperation with “friendly countries.”

In 2013, Belgrade and Baku signed a declaration on friendly relations and strategic partnership, which laid a legal foundation for higher volumes of economic, cultural, military and political cooperation between Serbia and Azerbaijan. Previously, in 2012, Azerbaijan provided a loan of $374 million for the construction of a highway in Central Serbia. As a result, Azerbaijani AzVirt company got involved in civil engineering projects in Serbia. It is building a motorway in Western Serbia, and is engaged in the construction of a bypass route around Belgrade.

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Over the years, the trade volume between the two countries grew enormously. For instance, according to the official statistics, in 2019, the volume of foreign trade amounted to only $7.88 million, while in 2021 it reached $56.8 million, the amount that still represents a fairly low trade turnover. But if Serbia manages to get connected to the Southern Gas Corridor, the trade volume will almost certainly skyrocket, although the Balkan nation will undoubtedly record a huge trade deficit with the energy-rich Caspian Sea state.

Some experts, however, argue that Serbia is unlikely to start importing gas from Azerbaijan any time soon, given that the country’s gas infrastructure—namely the interconnector linking Serbia and Bulgaria—has not been built yet. Further, nations such as Greece and Italy–major buyers of Azerbaijani gas—have already signed contracts and booked billions of cubic meters of natural gas from Shah Deniz gas field, the largest natural gas field in Azerbaijan, which means that Serbia cannot count on gas supplies from the former Soviet republic in the near future.

What Serbia can soon get from Azerbaijan is electricity. It is not a secret that the southeastern European country is interested in joining the Azerbaijan-Georgia-Romania Black Sea Submarine Cable Project and connecting with Romanian and Hungarian power grids. In August, an interstate agreement on the purchase of electricity from Azerbaijan on “favorable terms” was reached by Vucic and Aliyev. As a result, the Balkan nation is expected to start purchasing electricity from Azerbaijan as early as January 2023.

Indeed, the two countries will continue expanding energy, economic and military ties, but it might take a while before Azerbaijan starts playing a more important role in Serbian energy policy, which seems to be the major driver of Belgrade’s cooperation with Baku, Aze writes.

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