Following the signing of a strategic energy cooperation agreement between Serbia and the United States, speculation has arisen regarding its potential implications for Serbia. Although the specifics of the agreement have not been disclosed, U.S. Assistant Secretary of State for Energy Jeffrey Piatt indicated that it serves as an umbrella agreement encompassing multiple projects.
One major topic of discussion is the diversification of Serbia’s natural gas supply sources, particularly as the country currently relies heavily on Russian gas imports. Serbia has a gas interconnector with Bulgaria, linking it to a pipeline that brings gas from Azerbaijan. Official sources state that Serbia has secured 400 million cubic meters of gas, which accounts for only 13% of its annual consumption of three billion cubic meters. Additionally, there are plans to access liquefied petroleum gas (LPG) through a terminal in Alexandropoulos, where Serbia has reserved 300 million cubic meters annually, with American companies holding a 25% stake in the terminal.
The increased presence of American LPG in Europe, especially following the Ukraine conflict, adds complexity to this situation. However, experts warn that U.S. liquefied gas is significantly more expensive than pipeline gas, with prices estimated to be about 2.4 times higher for countries on the Atlantic coast. This discrepancy is even greater for eastern European nations. Energy expert Miloš Zdravković highlighted the extensive process involved in transporting U.S. gas, from extraction in Texas to conversion and shipping across the Atlantic, which ultimately raises costs.
Serbia is also approaching a crucial negotiation with Russia for a new gas supply contract in March, and Zdravković suggests that Serbia’s diversification efforts could impact these discussions. He stated, “Friendship is friendship, but gas is business,” indicating that if the U.S. can sell gas elsewhere, Serbia may face higher prices.
Another potential project arising from the U.S.-Serbia energy agreement is the construction of the Đerdap 3 hydroelectric power plant. Discussions have already taken place with American company Bechtel regarding this reversible hydroelectric facility, identified as crucial in energy strategies.
Furthermore, American companies may also be involved in Serbia’s nuclear energy development. While negotiations with France are underway, U.S. firms like Westinghouse and General Electric are among the world’s largest nuclear power manufacturers. There is speculation that they could take on roles alongside French companies, particularly if multiple nuclear blocks are constructed in Serbia.
Official statements surrounding the agreement emphasize a focus on renewable energy sources. Serbian Foreign Minister Marko Đurić noted that the agreement aims to facilitate Serbia’s green transition and improve access to clean energy. U.S. Undersecretary for Economic Growth, Energy, and Environment, Jose Fernandez, also highlighted the potential for American investment in clean energy technologies in Serbia.
Just before the agreement was signed, Minister of Energy Dubravka Đedović Handanović expressed optimism that it would attract new investments, enhancing energy security and supporting a shift towards sustainable energy sources. However, experts like Zdravković caution that prioritizing renewable energy over base energy production could be problematic, as renewable sources cannot always provide consistent power.
American companies are already involved in significant energy projects in Serbia, including plans for a one-gigawatt solar power plant, which could begin operations by 2028. This initiative, part of a broader goal for Serbia to produce half of its energy from renewable sources by 2030, involves collaboration with the South Korean company Hyundai Engineering and UGT Renewables. The U.S. Exim Bank is among the project’s financiers, and the consortium will build the solar plant before transferring management to EPS.
