At the Strategic Council for cooperation between Serbia and Hungary in Palić, it was agreed to establish a joint company for gas trade, and this was embodied in the agreement between Srbijagas and the Hungarian electricity company MVM, which agreed on a joint appearance on the Serbian market. Although not all the details are known yet, experts point out that the signatories of the agreement are companies that have been working for many years and are able to coordinate their interests and act together.
Before the agreement was signed, the Government of Serbia passed a resolution on granting prior consent to the establishment of a joint venture company of Serbia and Hungary for gas – SERBHUNGAS d.o.o. MVM normally deals with the production, distribution and trade of electricity, but it is also present in the gas sector.
Already after the first announcements, the question arose as to what the citizens of Serbia and Hungary will get from the joint venture, and experts in the field of energy note that we do not yet know what the intentions of the Serbian and Hungarian sides are because the details have not been published.
“If the proposal is to develop gas storage facilities in our country, we have both an offer from the Russian side and an offer from the EU, so we can choose, it’s better to choose both offers and do it, we don’t need a Hungarian or any other partner. And if the option is if we use their gas storages, it can be a potentially good deal,” says energy expert Miloš Zdravković for Euronews Serbia
According to him, gas is bought when it is cheap and sold when it is expensive, and it can be traded if you have gas storage facilities.
“If we are going to build gas storage facilities, that’s one thing. Another thing, I should say, there are better options for us if the Hungarians transfer part of their gas storage facilities to that joint company. Hungary has large capacities of gas storage facilities, they have close to six billion cubic meters built gas storage facilities,” said Zdravković.
However, he said that if the subject of the agreement is for the Hungarians to provide gas storage facilities, and for us to provide the market, it would be a potentially favorable deal for both Srbijagas and the state of Serbia.
“But if the subject of the agreement is the joint construction of gas storage facilities in, say, Srpski Itebej, that is bad for us because we simply have the possibility to take out favorable loans from European banks with favorable conditions and to construct gas storage facilities close to a billion cubic meters in Srpski Itebej, and the Russian the offer to expand the existing gas storage in Banastski dvor to one billion cubic meters means that we are doubling It,” Zdravković believes.
The president of the Gas Association, Vojislav Vuletić, told Euronews Serbia that a new company would certainly not be created if it did not plan to make some kind of profit.
“As soon as there is trade, everyone makes money from trade. It is not a bad idea to have a joint venture that will be able to trade gas both on the territory of Serbia and on the territory of Hungary. We are a transit country for gas, when you look at it – the Balkan Stream comes through our territory, goes for Hungary, it goes to Bosnia, a plan is being made to go to Croatia and Austria as well. So, there will be interest when it comes to trade, it will be possible to provide transit and sales of gas to neighboring countries in some way. I think that not a bad idea,” says Vuletić.
When could the joint venture start working?
Zdravković stated that the Hungarian MVM is a serious company, a counterpart to our EPS in terms of size, with the fact that it also deals with gas, not only electricity, and also owns a nuclear power plant in Paks.
“Unlike some other companies that appeared on our market, non-transparent in one way or another, this is a respectable company, not a bow-and-bag company,” said Zdravković.
However, he stated that the proposal for an agreement on the establishment of a joint venture with EPS, which the Hungarian company recently offered, was totally unfavorable for us. However, when it comes to the gas trade agreement, he adds that there are unknowns.
“If we invest money, they should also need money, if they invest money, we should also need money, not our potentials. If we are talking about gas trade, I think that we can build a gas storage facility ourselves, if the Hungarians are not there for us required. The price of gas is now 39.49 euros per megawatt, which is approximately 400 euros for 1,000 cubic meters, and let’s say on May 29, less than a month ago, the price of gas was 22.11 euros per megawatt. Gas has almost doubled It’s a highly profitable business, simply build a gas storage facility, buy it when it’s cheap, and sell it when it’s expensive. We simply don’t need a partner there,” said Zdravković.
Vuletić said that at the moment we have Russian gas, but that some plans are being made to get Azerbaijani gas, although only in some perspective.
As Vuletić stated, the joint venture of the Hungarian and Serbian gas trading partners could start functioning tomorrow because Srbijagas and the Hungarian company are companies that have been working for many years and they only need to coordinate their interests and act together without any problems.
“I think they can start working tomorrow. We certainly have the necessary infrastructure, we have branched out our network well and we have also built compressor stations that are important for the transit of gas to the north and to Central Europe, so I think it’s all okay. Our gas storage is in operation, and at the same time we also use the Hungarian gas storage, and this is a good benefit that the Hungarians have provided us, that we can store our gas there, in their storage, in case we need more gas,” says Vuletić.
Sign up for business updates & specials.
