Serbia is progressing with the long-anticipated expansion of its sole underground gas storage facility located at Banatski Dvor, a project that underscores the complexities of its energy system. Despite the expansion, which is projected to be completed by the end of 2026, control over a significant portion of the facility remains linked to Russia’s Gazprom.
The planned expansion aims to boost the total storage capacity from approximately 450 million cubic meters to about 750 million cubic meters, adding around 300 million cubic meters of new space. However, even with this increase, Serbia will only have unrestricted access to just over 350 million cubic meters due to Gazprom’s ongoing control over a substantial part of the storage capacity.
This ownership model stems from a joint venture arrangement involving Srbijagas and Russian partners in Banatski Dvor. Consequently, a portion of the storage capacity is effectively allocated for Russian commercial use rather than enhancing Serbia’s energy security.
Currently, Serbia’s domestic gas storage capacity remains relatively modest, unchanged at around 450 million cubic meters for over a decade due to delays in the expansion project. To mitigate this limitation, Serbia has heavily relied on external storage solutions, particularly in Hungary. Agreements with Hungarian counterparts have secured access to approximately 500 million cubic meters of foreign storage, costing around €275 million under previous contracts.
This reliance on external storage reveals a broader vulnerability within Serbia’s gas infrastructure, highlighting both supply and storage dependencies on foreign systems. The Serbian government has set an ambitious target of achieving a total storage capacity of 2 billion cubic meters, which would enable the country to meet about half of its annual gas consumption domestically.
Reaching this goal would necessitate not only the complete expansion of Banatski Dvor but also the establishment of additional storage facilities, representing a multi-billion-euro infrastructure initiative aimed at diversifying energy sources. This diversification has become increasingly central to Serbia’s energy policy, with officials emphasizing the need for alternative supply routes, including potential gas imports from Azerbaijan and access to liquefied natural gas (LNG) through regional interconnections.
Nevertheless, the ongoing Russian ownership within key storage assets raises questions about the effectiveness of these diversification efforts. Despite Serbia’s intentions to broaden its energy supply options, significant portions of its gas infrastructure remain under the influence of its primary supplier.
The challenges surrounding this issue are not new; plans for expanding Banatski Dvor were first established in 2015, followed by agreements in 2016 and 2019. However, progress has been hampered by delays primarily attributed to Russian stakeholders, which analysts suggest may serve as leverage to maintain Serbia’s reliance on Russian gas supplies.
Operationally, this split ownership results in practical limitations. At various points, Serbia has stored around 400 million cubic meters of its own gas alongside approximately 270 million cubic meters owned by Russia. This illustrates how while capacity may be shared, it is not equally accessible.
For policymakers in Serbia, addressing these issues involves a dual focus: increasing storage capacity for enhanced resilience during peak demand periods while also seeking a shift in ownership or control dynamics. The expansion at Banatski Dvor represents an incremental step within an existing framework where infrastructure and geopolitics remain closely intertwined.
In summary, Serbia’s approach to expanding its gas storage capabilities reflects both technical necessities and enduring dependencies on Russian energy structures.
