Gazprom breaks ground on Serbian TPP

13 March 2019, Week 10, Issue 1022

Gazprom Energoholding, the electricity arm of Russia’s state gas exporter Gazprom, has started construction on a new 200-MW gas-fired thermal power plant (TPP) in northern Serbia.

The project, now several years behind schedule, will provide cheaper supplies of heat to a nearby oil refinery controlled by Gazprom. It is also aimed at establishing demand for gas due to arrive in Serbia via the company’s TurkStream pipeline.

Serbian energy officials and Gazprom executives gathered in Pancevo on March 7 to attend a ground-breaking ceremony. The plant is due online in 2020 and will supply heat to the Pancevo oil refinery operated by Gazprom Neft’s NIS joint venture with the Serbian government. Its electricity will be sold to customers in Serbia and overseas.

Construction is slated to cost 180 million euros (US$203 million), Gazprom Energoholding’s head, Denis Fyodorov, told Russia’s Kommersant newspaper last week. The bulk of this sum is covered by a 140 million euro (US$158 million) loan from Gazprom’s financial unit, Gazprombank. The company expects to recoup its expenses within 10-12 years and earn a 14% return on investment, according to Fyodorov. China’s Shanghai Electric is serving as an EPC contractor, while Italy’s Ansaldo Energia is supplying the plant’s gas turbines.


Creating demand

Gazprom’s operations in Serbia are extensive, reflecting the close political ties between Moscow and Belgrade. Through NIS, it controls a second Serbian refinery in Novi Sad, as well as a minority share in the HIP Petrohemija petrochemical company, based in Pancevo. The company also supplies almost of all of Serbia’s gas, with shipments reaching 2.15 bcm last year.

The Pancevo TPP will be the first combined-cycle gas power station ever to be built in Serbia, which relies on coal for most of its energy needs. And Gazprom already has several similar projects in the pipeline.

Fyodorov signed a MoU at last week’s ceremony with Serbian Energy Minister Alexander Antic on the development of additional combined heat and power (CHP) ventures, as well as upgrades at existing plants. Speaking with Kommersant, the Gazprom executive outlined plans to build as many as four plants in Serbia, with capacities of up to 400 MW, along the route of the TurkStream pipeline.

“We have created a working group that will consider options for the construction of the combined-cycle power plants,” he told the newspaper, cautioning that it was too early to comment on a schedule for their development.

The TurkStream pipeline consists of two 15.75 bcm per year strings that run from Russia under the Black Sea to western Turkey. One is designed to serve the Turkish gas market and the second is expected to provide supplies to southeastern Europe. Due online in 2020, the second string is anticipated to run through Serbia and Bulgaria, before terminating in Hungary.

Gastrans – a joint venture between Gazprom and Serbia’s state gas operator Srbijagas – opened a tender this week for binding bids to book capacity at the 400-km Serbian stretch of TurkStream. The section, which will be capable of flowing 13.88 bcm per year of gas, is slated for launch in January 2020. Those firms interested in booking capacity up until September 2039 will need to submit their offers no later than March 18.

Joseph Murphy

Edited by

Joseph Murphy


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