Division of Srbijagas into two companies in the pipeline - Third phase to see formation of Serbian Energy Holding

Srbijagas should be divided into two state-owned companies by the end of 2013, Serbian Energy Minister Zorana Mihajlovic announced Tuesday.

Presenting the starting points for restructuring Srbijagas, the minister told a press conference that the plan for reforming that public company should be adopted by the Serbian government within the next ten days, adding that all other ministries had already assessed it positively.

Mihajlovic specified that the first phase of restructuring, which should be completed by end-October, would see both financial and business consolidation of Srbijagas. In agreement with the Finance Ministry, this would include the rescheduling of debts and claims.

Then, by the end of the year, gas distribution and trade will be separated from gas transport and storage.

The minister stressed that none of the Srbijagas employees would lose the job.

Mihajlovic noted that the company engaged in gas distribution and trade would be called Srbijagas, whereas the name of the one engaged in gas transport and storage would be Transgas.

- The aim is to have a better, more sustainable and, I sincerely hope, lower price of gas, which is why we reform Srbijagas so our consumers could know what they buy and pay for - she said.

The energy minister said that Srbijagas had made serious financial and business losses with its last year's capital being 26 times smaller than in 2011.

According to the reports of the Energy Agency, Srbijagas' debts exceed EUR 1 billion.

Mihajlovic added that the reform of Srbijagas was a precondition for stable gas supply, stressing that the aim of the government was to make that public company profitable.

The third phase of the Srbijagas reform should see the formation of Serbian Energy Holding (Srpski energetski holding) that would comprise companies Transgas, Transnafta and Elektromreza Srbije (EMS), and later Gasna Skladista as well.

Mihajlovic voiced her expectation that an agreement to form that holding, which would be one of the largest in the region and capable of both attracting more investments and investing more in the region, would be reached by the end of 2014.