SARAJEVO, October 15 (RIA Novosti) - Russian energy giant Gazprom and Serbia's state gas company have initialed an agreement to set up a joint venture to develop a Serbian underground gas depot, Srbijagas said on Thursday.
The agreement on Banatski Dvor is part of a bilateral governmental deal on cooperation in the oil and gas sector sealed between the two countries in 2008.
"Srbijagas General Director Dusan Bajatovic said the agreement will be signed during a visit by Russian President Dmitry Medvedev to Belgrade on October 20," the company's press service said on Wednesday.
Construction of the underground gas depot at Banatski Dvor started in 2005. The gas storage facility will have a capacity of 0.8-1 billion cubic meters. It will be connected to the proposed 25 billion-euro ($36.5 billion) South Stream gas pipeline, intended to annually pump 31 billion cubic meters of Central Asian and Russian gas to the Balkans and on to other European countries, bypassing Ukraine.
The construction of the Banatski Dvor depot is a stage of gas production at a worn-out field which used to have reserves of 3.3bcm.
The agreement will be signed by Srbijagas, Gazprom's export arm Gazprom Export, and German subsidiary Gazprom Germania, the Serbian company said.