Serbia 'sticking to South Stream'

In the pipeline: Serbia says construction going ahead on South Stream

The governments of Russia and Serbia said they expected the construction of the Serbian leg of the Gazprom-led South Stream gas pipeline to begin as planned next month despite continuing EU and US pressure that has already seen Bulgaria suspend its part of the project.

Speaking after talks in Belgrade, Russian Foreign Minister Sergei Lavrov was quoted by Reuters as saying: "All agreements remain in force and no changes have occurred. We consider that everything will proceed as planned."

His Serbian counterpart Ivica Dacic said: "All economic projects that have been started will be continued. It is in our national interest for South Stream to be built."

Serbia has started accession talks to join the EU, but also holds historical ties with Russia and its main oil company NIS is 51% owned by Russia’s Gazprom Neft.

Gazprom holds 51% of the Serbian section of the pipeline while Serbian state gas distributor JP Srbijagas holds the other 49%.

Last week, EU member state Bulgaria made a surprise decision to suspend all work on its section of the pipeline after a visiting US delegation warned Bulgarian companies could face sanctions if it did not halt the project.

Sofia had initially resisted earlier calls from Brussels to stop the pipeline both over political considerations given the crisis in Ukraine and concerns that the tenders for the project were not awarded in accordance with EU competition rules.

South Stream is designed to pipe 63 billion cubic metres of gas per year from Russia to central and southern Europe while bypassing Ukraine.

The 934-kilometre line runs from the Russian sector of the Black Sea to Bulgaria, Serbia, Hungary and Slovenia before terminating in Austria.

Moscow on Monday cut gas supplies to Ukraine in a row over prices but also insisted Kiev must let Russian gas flow across the country through international pipelines to clients in the EU.

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