Serbia urges firms to seek Russia gas alternatives

By Ivana Sekularac

BELGRADE, Jan 5 (Reuters) - Serbia called on industrial natural gas consumers to prepare to switch to another fuel should a row between Russia and Ukraine continue, the head of the state-run gas monopoly said on Monday.

The Balkan country has roughly a 10-day supply. Serbia imports 92 percent of its 2.4 billion cubic meters of natural gas annually from Russia via Hungary and Ukraine. Eight percent comes from domestic sources.

"We have already asked our major consumers to prepare plans for switching to another fuel," Dusan Bajatovic, head of Srbijagas, said in an interview. "Until now we have managed to get our daily natural gas deliveries."

Alternatives include electricity and oil derivatives.

Russian gas monopoly Gazprom (GAZP.MM) cut gas supplies to Ukraine on Jan. 1 in a dispute over debts and pricing. [ID:nL513944]

The measure comes as European countries, which get a fifth of their gas through pipelines that cross Ukraine, face freezing temperatures.

"We hope that this crisis will end soon," Bajatovic said, adding his company is making backup plans.

In December, Serbia signed an energy pact with Russia which will see Serbia included in the South Stream pipeline, Gazprom's 10 billion euro ($13.93 billion) joint project with Italy's ENI (ENI.MI) to deliver Siberian gas under the Black Sea to southern Europe.

The deal also includes building a natural gas storage facility in north Serbia.

"We have 100 million cubic metres of natural gas reserves at the moment," Bajatovic said. Serbia uses about nine or 10 million cubic metres a day in winter.

Other countries in the Balkans, a region still recovering from war and political turmoil in the 1990s, said their economies were not affected by the row.

A government official who spoke on condition of anonymity said Macedonia had no problems with natural gas supply.

The source said the economy was not likely to be affected as most of its companies were closed during the holiday season which lasts until Jan 7.

Almir Becarevic, general manager of Bosnia's main gas distributor BH Gas, said the country had no shortages in natural gas supply despite higher consumption due to low temperatures.

Albania is not connected to any external gas networks. (Additional reporting by Kole Casule in Skopje, Maja Zuvela in Sarajevo and Benet Koleka in Tirana; Editing by Adam Tanner and Sue Thomas)