Economy

Serbia leader calls Gazprom pipeline vital

BELGRADE, Serbia (AP) — Gazprom's South Stream pipeline, which will bypass Ukraine to transport Russian natural gas to Europe, is vital for Serbia because it will provide jobs and boost the Balkan country's regional position, the prime minister said Sunday, insisting that traditionally close ties with Russia will not affect his nation's bid to join the European Union.

In an interview with the Associated Press at the formal start of the pipeline construction work in Serbia on Sunday, Ivica Dacic said that Russia, which has supported Serbia politically in a dispute with the West over Kosovo, does not object to the country's effort at EU membership. He also suggested that Western powers have in fact pushed Serbia closer to Russia.

"Those (in the West) who criticize Serbia for its closeness to Russia and for our partnership with Russia, should ask themselves why they haven't offered such relations to Serbia?" Dacic said. "I keep telling the West: Serbia needs a strategic partner in the West too ... But, they are not interested at all."

Dacic also dismissed allegations by Serbia's pro-Western opposition parties that the 2008 energy deal, under which Serbia sold 51 percent of its oil and gas monopoly to Gazprom as part of the South Stream agreement, paved the way for Russian economic and political dominance of the country. He said that critics "are afraid of Russia's presence in this part of the world."

The trans-European pipeline is expected to start operating in December 2015. It is expected to ship up to 63 billion cubic meters (2 trillion cubic feet) of gas annually to Bulgaria, Serbia, Hungary, Slovenia, Austria and Italy in one leg and Croatia, Macedonia, Greece and Turkey in a second.

The pipeline's route bypasses transit nation Ukraine. Pricing disputes between Russian and Ukraine have caused major disruptions in recent years, cutting gas for millions of customers. Serbia's state television on Sunday aired live the pipeline inauguration ceremony, attended by top officials and Gazprom chief Alexey Miller. President Tomislav Nikolic formally gave the go-ahead in a video broadcast from the capital, Belgrade.

Dacic said the stretch of pipeline in Serbia will cost about 2 billion euros ($2.7 billion). It will be financed by Gazprom, while Serbia will pay back its share later through pipeline transit taxes, he added. About 20,000 people will work on construction and other jobs around the pipeline, including building gas storage and gas energy plants, Dacic said.

"This is vital for Serbia's energy safety ... Serbia will become an energy hub," Dacic insisted. "We will be part of a pan-European project; this is not just a Russian project." Dacic said that Serbia is willing for one of the pipeline branches go to Kosovo, its former province, which declared independence in 2008. Serbia has refused to recognize the split, but it has moved to normalize relations to move closer to EU membership — Belgrade and Pristina signed an EU-brokered agreement in April.

Russia has backed Serbia's claim over Kosovo, while the United States and most EU nations have recognized Kosovo's independence. Russia has been Serbia's key ally in preventing Kosovo from gaining full statehood in the United Nations.

Dacic described Serbia's ties with Russia as "friendly and relations of strategic partnership in economic and political issues." "We wish to unite our two strategic goals: partner relations with the Russian federation and EU membership," he said, adding that Serbia would also want closer relations with Washington.

"But, it takes two for a partnership," he said.

Associated Press writer Dusan Stojanovic contributed to this report.

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