* Eyes pipeline in northern Bosnia
* Will consider building a pipeline arm to Sarajevo
By Ivana Sekularac
BELGRADE, Oct 15 Serbia's gas monopoly Srbijagas
will seek a concession to construct a pipeline through northern
Bosnia with a total capacity of 1.2 billion cubic metres, the
company's chief executive said on Thursday.
The aim is to link the Serb Republic to a section of the
South Stream gas pipeline mulled by Srbijagas and Russia's
Gazprom (GAZP.MM), Srbijagas's Dusan Bajatovic told reporters.
He added that Srbijagas has yet to negotiate with
governments in Bosnia's two autonomous regions -- the Serb
Republic and the Muslim-Croat federation -- about the project.
"That pipeline will go along Sava river to Banja Luka and
will be enough to meet the needs of Serb Republic," he said. "We
will offer to build one arm of pipeline to Sarajevo to supply
the Muslim-Croat federation."
The South Stream pipeline arm would allow Serbia, through
which all gas enters Bosnia, to diversify its gas supplies and
avoid shortages, like the one in January during the gas row
between Russian and Ukraine.
The Gazprom-led South Stream project has been designed to
bypass Ukraine to transport Russian gas under the Black Sea to
Bulgaria and onwards to Serbia and Europe. It is a rival to the
European Union-backed Nabucco pipeline, which aims to reduce
Europe's reliance on Russia for its energy supplies.
Part of the funding for the pipeline in Bosnia would come
from a 150 million euro ($223.8 million) loan the European Bank
for Reconstruction and Development (EBRD) is considering for
Srbijagas, Bajatovic said.
"Out of that money, 50 million euros will be used for gas
supplies, 50 million euros for construction of the gas storage
facility and 50 million for our projects in Republika Srpska,"
In June, Srbijagas signed a deal to take a 40 percent stake
in Bosnia's regional gas firm, in a move seen by some as an
attempt to control gas inflows to the neighbouring country.
Bajatovic added the state power monopoly should also soon
finalize a $72 million deal this week with the Hungarian gas
trading unit of E.ON (EONGn.DE) to rent a storage facility in
Hungary to store 200 million cubic metres of gas.
Serbia should also complete its own gas storage facility in
the northern part of the country for 300 million cubic metres of
gas, he said.
"That should be enough to supply the market for 60 days,"
(Editing by Michael Kahn and James Jukwey)