Memorandum signed for gas pipeline Kraljevo-Kragujevac - project worth about 8m EUR

The Memorandum of understanding for realization of the project for construction of Kraljevo-Kragujevac gas pipeline was signed on Friday (March 12, 2010) in Kragujevac.

The Memorandum was signed at Šumadija Fair by the CEO of Srbijagas, Dušan Bajatović, the Mayor of Kragujevac, Veroljub Stevanović, and the Deputy President of the City Assembly of Kraljevo, Sreten Jovanović.

Construction of high-pressure gas pipeline Kraljevo-Kragujevac will provide capacities and sufficient quantity of gas for all energy resources, industry and population in Kragujevac and Šumadija.

Bajatović said to the press in Kragujevac that the construction of gas pipeline was one of Serbia's contractual obligations towards Italian Fiat. Construction of the gas pipeline should make it possible for Fiat Automobili Srbija to be supplied with 30,000 cubic meters of gas.

- According to the old plan, the Kragujevac-Kraljevo gas pipeline project is worth 8m EUR, but we will know if anything is going to be changed once we analyse all the existing projects in this domain - said Bajatović.

He added that part of the contractual obligations related to gas supply system development based on the project of Serbia and Italian Fiat was already being fulfilled through enlargement of capacities of the gas pipeline from Lapovo to Kragujevac.

- The extension of the branch to Kraljevo will help, in technical sense, better functioning of the system and stability of gas ring on the territory between Čačak, Kraljevo, Užice and Kragujevac - said Bajatović.

He announced that the realization of the Memorandum would start right away and that the joint venture would be formed to draw the plans for the gas pipeline.

The Memorandum anticipates that the costs of services of Srbijagas and administrative taxes of the cities be reduced to a minimum.

- Financing of the gas pipeline construction will depend on the agreement between Srbijagas and the National Investment Fund - said Bajatović.

- About 450m EUR are needed for completion of the whole gas system in Serbia, without Južni Tok and gas storages - said the CEO of Srbijagas.

The Mayor of Kragujevac, Veroljub Stevanović, said that the works were being carried out on gas pipeline Lapovo-Kragujevac, but he added that the construction of the branch to Kraljevo was important for stabilization of the whole system.