Serbia is moving ahead with long-delayed plans to expand its only underground gas storage facility at Banatski Dvor, yet the project continues to expose a fundamental constraint in the country’s energy system: ownership and control remain deeply intertwined with Russia’s Gazprom.
The expansion, expected to be completed by end-2026, will increase total storage capacity from roughly 450 million cubic metres to around 750 million cubic metres, adding about 300 million cubic metres of new space.
However, the headline increase masks a more complex reality. Even after expansion, Serbia will be able to freely dispose of only just over 350 million cubic metres, because a substantial portion of the facility remains under Gazprom’s control.
This ownership structure is rooted in the joint venture model behind Banatski Dvor, where Serbia—through Srbijagas—holds a minority or shared stake alongside Russian partners. In practice, this means that part of the storage is effectively reserved for Russian commercial use, not for Serbia’s domestic energy security.
The result is a paradox: capacity is increasing, but sovereign control over that capacity is not expanding at the same pace.
In absolute terms, Serbia’s current storage position remains modest. The country has around 450 million cubic metres of domestic storage capacity today, a level that has remained unchanged for more than a decade due to repeated delays in the expansion project.
To compensate, Serbia has relied heavily on external storage, particularly in Hungary. Through agreements with Hungarian partners, it has secured access to roughly 500 million cubic metres of storage abroad, albeit at a cost that has reached approximately €275 million under earlier arrangements.
This dependence on external storage highlights a broader structural vulnerability: Serbia’s gas system is not only supply-dependent but also storage-dependent on foreign infrastructure.
The government’s longer-term ambition is significantly more ambitious. Authorities have outlined a target of 2 billion cubic metres of total storage capacity, which would allow Serbia to cover roughly half of its annual gas consumption domestically.
Achieving that level would require not only the full expansion of Banatski Dvor but also the development of additional storage sites—effectively a multi-billion-euro infrastructure agenda tied to broader energy diversification.
That diversification is increasingly central to Serbia’s energy policy narrative. Officials have explicitly linked storage expansion to the need for alternative supply routes, including gas from Azerbaijan and potential access to LNG via regional interconnections.
Yet, the persistence of Russian ownership within the core storage asset underscores the limits of that strategy. Even as Serbia seeks to diversify supply, the physical infrastructure that underpins its gas system remains partially controlled by its dominant supplier.
This tension is not new. The expansion of Banatski Dvor was first agreed in 2015, with multiple follow-up agreements signed in 2016 and 2019, but progress stalled for years, largely due to delays on the Russian side.
The delays themselves have often been interpreted by analysts as leverage—maintaining Serbia’s dependence on Russian gas both in supply and in storage.
In operational terms, the split ownership translates into tangible constraints. At various points, Serbia has held roughly 400 million cubic metres of its own gas in storage, alongside around 270 million cubic metres belonging to Russia, illustrating how capacity is shared but not equally accessible.
For policymakers, the challenge is therefore twofold. Increasing storage capacity is necessary to improve resilience, particularly during winter demand peaks. But without a parallel shift in ownership or control, capacity expansion alone does not fully translate into energy sovereignty.
The expansion of Banatski Dvor is thus best understood not as a transformational step, but as an incremental adjustment within a constrained system—one where infrastructure, contracts and geopolitics remain tightly interlinked.
In that sense, Serbia’s gas storage strategy sits at the intersection of two competing dynamics: the technical need to build domestic buffers and the structural reality of long-standing dependence on Russian energy architecture.
