The Republic of Srpska (RS) and Gazpromneft have reached a deal regarding the construction of a line of the South Stream gas pipeline coming from Serbia.

The route of the pipeline will go from Serbia to the RS and then into the Federation of Bosnia-Herzegovina as well.

RS Prime Minister Milorad Dodik and Gazpromneft Deputy President Aleksandr Medvedev agreed that a feasibility study should be done first, and that appropriate agreements should be signed according to its findings, RS Energy Minister Slobodan Puhalac, who participated in negotiations, told Beta news agency.

He stated that that this had been a continuation of the negotiations which had started last fall in Belgrade between Serbian President Boris Tadić and Medvedev.

The construction of the gas pipeline along the Sava River would, according to him, provide sufficient amounts of gas for both RS and the entire Bosnia-Herzegovina, meaning more than 1.5bn of cubic meters of gas a year.

Speaking on a meeting with Russian Foreign Minister Sergey Lavrov and Presidential Representative for Central Federal District Georgy Poltavchenko held on Thursday, Puhalac said that the talks had been about the Brod Oil Refinery, whose shares package has been bought by Russian Zarubezhneft.

Puhalac also said that the Russians have confirmed more investments for the refinery, the achievement of the Euro 5 standardm and ab increase in capacities from 1.2mn tons to 4.2mn tons in the coming period.

The construction of the Brod-Modriča railway and an increase in capacity of Modriča Oil Refinery have also been confirmed, the RS energy said.

According to him, there were also talks about a study of raw oil reserves in RS and Bosnia-Herzegovina, which are estimated to contain about 50mn tons.