Focus on Energy, 2010 - Karanovic & Nikolic

domestic source of natural gas, suppliers purchase their natural gas from abroad.In the RS the tariff system is applicable to all consumers of natural gas.GAS / FBIHThe only companies allowed to conduct activities related to the supply of gas to consumers in the FBIH forthe time being are “Energoinvest d.d.” of Sarajevo and “BH Gas d.o.o.” of Sarajevo. The company determinedto operate the gas transportation system in FBIH is BH “Gas d.o.o.” of Sarajevo.The prices for the sale of natural gas to tariff consumers and gas suppliers are regulated by the FBIH Government.On the proposal of the Federal Ministry of Trade and based on an opinion provided from the competentministries which are the FBIH Ministry for Energy and the FBIH Ministry for Mining and Industry. TheFBIH Government determines the gas supply price chargeable by gas suppliers that provide gas for tariffcustomers that are using the energy whilst performing public services in the FBIH 14 . The Company “BH-GAS d.o.o.” regulates the price chargeable for the supply of gas to the remaining tariff consumers. In thecase of any variation IN this price, “BH-Gas d.o.o.” is obliged to notify the competent ministry in writing.The price of natural gas is determined on the basis of the price of oil and oil derivatives on the worldmarket, defined delivery periods, the relations between planned and realized quantities of gas, and theseasonal and daily dynamics surrounding the delivery of gas to tariff consumers, all of which impact onthe price of gas. In the FBIH there are three types of consumers: privileged consumers, tariff consumersand protected consumers:of the annual consumption once it is within the limits of the gas quantities laid out for such use or (ii) afinal consumer that consumed more than 150 million m3 of gas in the previous year.of the above mentioned tariff customers that are performing a public service.partial disruption in the supply of gas or in the event of extremely low weather temperatures. However,this is only the case when there is a lack of any other alternative solution for energy supply.DEVELOPMENT PRIORITIES AND PROJECTSThe main priority for the gas sector in BIH is the development of a gas distribution networks in urban areasand the construction of gas pipelines. Major future projects that have been earmarked are the “Sava” gaspipeline (direction East-West) and the gas pipeline from the Croatian border towards central Bosnia (Brod-Zenica Gas Pipeline). Another project that will be significant in the forthcoming period is the constructionof 80km’s of a primary gas network in Northwest BIH where the European Bank for Reconstruction andDevelopment announced its interest in supporting the development of a gas network in Herzegovina. It isplanned that such a gas network would ultimately be connected with the Croatian pipeline to Split.59FOCUS ON ENERGYOilThe oil derivatives’ market in BIH is mainly dependent on imports from Croatia, Serbia, Montenegro andHungary. The oil refinery in Brod 15 has recently been reconstructed and has started the production of oilderivatives. Prices of oil derivatives are set according to the prevailing market conditions.Current production at the oil refinery in Brod is 1.2 million tons a year, but current activities on the reconstructionand modernization of a second production line would increase the capacity of the refinery to 4.2million tonnes, a figure that should completely satisfy domestic demands for oil derivatives in BiH. Recently,the export of oil derivatives has been made possible via river Sava. Oil derivatives are being exportedto the Black Sea region via this route.14 The Decree on the organization and regulation of gas sector economy (Official Gazette of the FBIH no. 83/07)15 The Oil Refinery Brod was bought in 2007 by the Russian oil company NefteGazInkor (subsidiary of the Zarubezneft).