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. Last Updated: 07/27/2016

Gazprom, Serbia to Sign Pipeline Agreement

Radomir Naumov, Serbia's minister for mining and energy, and Gazprom deputy CEO Alexander Medvedev will sign an agreement Wednesday to develop a natural gas pipeline through Serbia.

The agreement calls for building a 400-kilometer pipeline that will link Serbia with neighboring Bulgaria and Croatia and continue on to consumers in central and western Europe, the Serbian Ministry for Mining and Energy said in an e-mailed statement.

The pipeline will have an annual capacity of 20 billion cubic meters of gas. Serbia imports most of its natural gas from Russia and the pipeline's capacity would exceed its current needs by some 10 times, the statement said.

Serbia's partner in the venture will be the state-run Srbijagas gas provider. The preliminary costs were set at 1 billion euros ($1.3 billion), the statement said. Revenues are estimated at $200 million and should be shared equally among the partners, it said.

Construction is tentatively set to begin in 2007. The statement did not say how long it would take.

Last week, Serbia and Russia agreed to settle $288 million in Soviet-era debt -- $188 million of it will be used to settle Serbia's liabilities for gas deliveries. The remainder will be used to overhaul the Danube's Djerdap hydroelectric power plant, Serbian Economy Minister Predrag Bubalo said last Wednesday.