Focus on Energy, 2010 - Karanovic & Nikolic

The oil transportation system includes the 154.4 km long section of the ex-Yugoslav oil pipeline from theriver Danube on the Croatian border (the starting point of the pipeline is in Omišalj, Croatia) to oil refineriesin Pančevo and Novi Sad. It is operated by the Public Enterprise “Transnafta”.Serbia has two oil refineries both held by “Naftna Industrija Srbije” (“NIS”) (controlled by Gazprom). Theoriginal capacity of the domestic refineries was 7.8 million tonnes per year (4.8 million tonnes in Pančevoand 3 million tonnes in Novi Sad). Due to damage suffered during the NATO bombing in 1999, the operationalcapacity of Serbian oil refineries has been reduced to 6.6 million tons (4.8 million tons in Pančevoand 1.8 million tons in Novi Sad).The majority of the Serbian oil and oil derivatives distribution network is held by NIS (some 480 outlets)while the remaining 800 are operated by private companies, including the Austrian company “OMV”,“Lukoil”, “MOL”, “Hellenic Petroleum” and others.DEVELOPMENT PRIORITIES/PROJECTS22FOCUS ON ENERGYfrom the Caspian and Black Sea regions is starting from the Romanian port of Constantza and expandingthrough Serbia, Croatia and Slovenia to Trieste in Italy. The 200 km long Serbian section ofthe PEOP should enter Serbia at Bela Crkva, proceed along by Deliblatska peščara and then proceedby Pančevo and Novi Sad to Sotin which is along the border with Croatia and follows the route of theexisting oil pipeline. In April 2007, all five interested states and the European Energy Commissionersigned a ministerial declaration on PEOP. In February 2008, a general meeting of the Interstate Committeefor PEOP took the decision to incorporate a project development company, headquartered inLondon, England and the company was then registered in June that year. Its task will be to promotethe PEOP and to attract investors interested in the project. Serbia appointed “Transnafta” to act asthe founder of the project development company on its behalf.linesystem through Serbia with a total length of approx. 400 km (the “Petroleum Products PipelineSystem”). The pre-feasibility study with a general design for the Petroleum Products Pipeline Systemis prepared. In November 2007, the pre-feasibility study received a positive evaluation by the RevisionCommission of the Ministry for Infrastructure. At the end of January 2009 in Smederevo, therepresentatives of the Ministry of Environment and Spatial Planning, the Ministry of Mining and Energy,cities participating in the project, and “Transnafta” all signed a memorandum of understandingon the support of the construction project for the Petroleum Products Pipeline System.Coal SubsectorThe Serbian coal sector includes the coal extraction and processing of coal. Coal is the most widely foundfuel in Serbia, accounting for 51% of the total Serbian primary energy supply.The majority of Serbian coal production is from two open-pit mines in Kostolac and Kolubara (some36,930 million tonnes were extracted in 2009). Both the pits are operated by EPS. The total reserves oflignite coal are estimated at some 2.3 billion tonnes.95% of lignite coal from open-pit mines is used for the production of electricity in the thermal powerplants. In addition to lignite coal, Serbia also has smaller reserves of hard coal and brown coal which isexcavated from eight underground pit mines.Development priorities in the coal sector include the opening of additional units in the Kolubara basin,the revitalization of existing cost effective capacities and an investment in more environmental practicesat the existing mining facilities. Such cost effective and environmental practices are a general goal for allmining basins in Serbia.