(Bloomberg) -- Serbia is in talks with Russia to extend a natural gas supply contract that expires in March, and is targeting volumes similar to those under the current agreement with Gazprom PJSC.
Thanks to “solid relations” with Moscow, “we are in a very good position to speak about economy, to speak to Russia about the gas agreement,” Serbian Deputy Prime Minster Aleksandar Vulin said Friday.
The Balkan state has sought to balance its relations with Russia and Europe following Moscow’s invasion of Ukraine. While Serbia hasn’t adopted Western sanctions targeting the Kremlin, it has provided aid to Kyiv and condemned the aggression.
The country consumes about 3 billion cubic meters of gas a year, relying on Gazprom — and its favorable prices — for around two-thirds of that volume.
The Russian gas comes via a Balkan extension of the TurkStream pipeline, which traverses the Black Sea and Bulgaria, bypassing Ukraine. That means Serbia can avoid a potential supply crunch when a key Kyiv-Moscow transit deal expires at year’s end.
Still, the nation has worked to diversify its sources by buying from Azerbaijan and opening up a route to get supplies from a liquefied natural gas terminal in Greece.
There’s been unease in the market since the US last month sanctioned Gazprombank, which European nations use to pay for the gas they still buy from Russia. Those concerns eased somewhat on Thursday as President Vladimir Putin changed the way foreign buyers will have to pay.
Serbia is aware of those changes, Vulin said. “As for payments, we’ll do whatever is agreed with Russia,” he said on the sidelines of the Verona Eurasian Economic Forum in the United Arab Emirates. “I am absolutely positive that we’ll sign a new agreement very soon, that we will have excellent conditions.”
(Updates with pipeline route in fifth paragraph.)
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