Serbia’s Minister of Mining and Energy, Dubravka Đedović and Hungary’s Minister of Foreign Affairs and Foreign Trade, Peter Szijjártó have signed a Memorandum of Understanding on the construction of the Hungary-Serbia crude oil pipeline.
The agreement, signed on Tuesday (20 June), was part of the first meeting of the Strategic Council for Cooperation between Serbia and Hungary.
“Serbia currently has only one way to supply crude oil, through Croatia, and for greater security, it is necessary that, as in the gas sector, we have diversification of sources and routes of supply. By building a new oil pipeline to Hungary, we will ensure a more secure supply of the domestic refinery and thus the domestic market. This project is planned with a list of priority investments as one of the strategic ones in the field of oil supply,” said Minister Đedović.
“Hungary is supplied with gas from the Balkan Stream via Serbia, and Serbia stores part of its gas reserves in Hungary. By building a new oil pipeline, we will further expand our strategic relations in the field of energy, and Serbia will raise its energy security to a higher level,” the Serbian Minister added.
The new crude oil pipeline, with a capacity of 5.5 million tonnes per year, is estimated to cost around 157 million on the Serbian side. The pipeline plans to follow the Szazalombata-Alđe-Roske-Novi Sad route, with a total length of 304 km and a potential extension to Thessaloniki and Durrës.
Before the project’s implementation begins, a separate agreement on the construction of the oil pipeline will be signed between Serbian “Transnafta” and Hungarian MOL Group as the joint project leaders. This agreement is expected to set out the technical and technological characteristics and time frame of the implementation, as well as define the mutual and individual obligations of the project’s participants.
Minister Szijjártó said that the construction of the new pipeline to link Algyő with Novi Sad was perhaps the most important agreement between the two countries ever. “The more resources, the more routes and the more cooperation, the greater energy security,” he said. “Hungary’s energy security would be unimaginable today without Serbia, and the same is true the other way around,” he said. “The majority of Hungary’s natural gas supplies arrive through Serbia and we keep in storage over a hundred million cubic metres on behalf of Serbia,” the Minister added.
During Tuesday’s bilateral meeting, plans for establishing a regional joint venture natural gas trading company were also confirmed, following an agreement signing between Director of Srbijagas, Dušan Bajatović and General Director of MVM CEEnergy, Laslo Zoltan Frico on the establishment of a joint venture between the Serbian Srbijagas and the Hungarian MVM CEEnergy.
Minister Szijjártó said that the new regional natural gas trading company would start operations in the autumn.
