Date: 30 November 2020

Turmoil over TurkStream Loan: Is Serbian Leg of the Pipeline In Danger?

The Serbian government has made a last-minute decision to remove from the parliamentary agenda a bill envisaging state guarantees on loans for the construction of a Serbian leg of the Russian TurkStream gas pipeline. Media outlets make speculations over political pressure from the U.S. as the country opposes the pipeline while Serbia’s pro-Russian president says the venture will be ready on time.


Aleksandar Vučić commented on the TurkStream issue shortly after the Serbian government on November 25 excluded from the parliamentary procedure a bill envisaging state guarantees on loans with a total value of 55 million euro for the construction of a leg running from Russian through Serbia and that of a compressor station in Velika Plana. A consortium of banks involving Komercijalna banka, OTP banka Srbija, Vojvodanska banka, and Sberbank Srbija would provide the loan. Under the bill, the government would offer its guarantees on repaying the loan taken out by Srbijagas. It is a top subcontractor tasked with building a compressor state in Velika Plana, the much-needed facility to supply gas to Hungary. Srbijagas was supposed to spend funds for the construction by investing in the capital of South Stream Serbia AG. However, it is Russia’s Gazprom that controls a 51 percent stake in South Stream Serbia AG, while Srbijagas holds the remaining 49 percent. The Swiss-registered firm owns the entire capital of Gastrans, the company in charge of the construction and operation of the TurkStream pipeline in Serbia. Bajatović is also a member of the Board of Directors at South Stream Serbia AG. Serbia’s government submitted a bill to the government while the country’s finance ministry handled all necessary procedures. While many signs were that the parliament would ratify the bill, it suddenly dropped off the session agenda. Serbia completed the pipelay on its segment of the TurkStream gas pipeline, chief executive of Srbijagas Dusan Bajatović said. Some Serbian media outlets informed about a possible conflict between Bajatović and the country’s new energy minister Zorana Mihajlović, who considers herself a pro-American politician. The Danas daily newspaper even called her a “U.S. cohort.” Tensions strained further so the Serbian president decided to comment on the issue. The Serbian segment of the TurkStream gas pipeline will be completed soon, Aleksandar Vucic told reporters on November 28. “We have agreements with Gazprom, we will do everything that is necessary. And as far as I can follow this very tight schedule of work, everything is going well. Everything is going very intensively, we will finish it in a few days,” the politician known for his pro-Russian sympathies told journalists.

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