Minister of Energy and Mining Petar Skundric said today that the construction of a section of the South Stream gas pipeline through Serbia and an underground gas storage facility will cost approximately €1.4 billion.

Skundric stated at a ceremony marking the Day of oil and gas industry workers, held at the Office of the Provost of Belgrade University, that the gasification of Serbia should be complete within the next five to six years, which calls for an investment of between €400 and €600 million.

He announced that Serbia, together with Gaspromneft, will invest nearly €1 billion in the oil sector over the next few years.

Apart from modernising the refinery in Pancevo, this investment will include investment in research of new oil fields and obtaining gas by means of unconventional procedures, Skundric outlined.

The Minister pointed out that the gas-oil deal is one of the cornerstones of the strategic partnership between Serbia and Russia, and a basis for better cooperation between the economies and peoples of the two countries.

He recalled that the there will be no change in electricity prices before 1 January 2011.

Skundric affirmed that the Serbian government is considering a system of measures related to energy supply for all users, especially district heating systems.

The Minister added that a possible price increase will be decided by the local authorities.

Russian Ambassador to Serbia Alexander Konuzin maintained it was difficult to find any other country other than Russia which has invested as much in Serbia in such a short time and added that this investment has brought benefits both to the Serbian and the Russian economies.

He underlined that Serbia and Russia have major joint plans for future development in the energy sector and expressed the hope that they will be successfully implemented.

At the initiative of the Ministry of Energy and Mining, the government adopted a proposal that 1 October be observed as a day dedicated to workers in the oil and gas industry since on this day three major Serbian companies in this sector were founded, namely the oil industry Naftna Industrija Srbije, gas industry Srbijagas and Transnafta.