Energy Community Secretariat criticizes Serbia's moves - Production still not separated from transmission at Srbijagas and Yugorosgaz

The EU Energy Community Secretariat has ruled that Serbia has failed to meet its obligations stipulated by the EEC rules on ownership unbundling in the natural gas market.

In a release published on its website, the EEC announces that the Secretariat has submitted a Reasoned Opinion in the case ECS-9/13 against Serbia, reiterating its view that Serbia has failed to comply with its obligations under the Energy Community Treaty related to the unbundling of two vertically integrated gas undertakings.

Serbia now has two months to rectify the identified issues of non-compliance, the EEC said in its Reasoned Opinion.

According to the Secretariat, the two transmission system operators (TSOs) licensed in the country, state-owned Srbijagas and Yugorosgaz, a 50% subsidiary of Russia`s Gazprom, did not fulfill its obligation to effectively separate activities of energy transmission from production and supply interests, as stipulated in the EU energy rules.

The Reasoned Opinion reads that although Yugorosgaz set up a separate pipeline subsidiary in the fall 2013, that wasn`t enough to ensure independent decision making within the company.

The EEC Secretariat is of the opinion that the lack of unbundling of the two TSOs represents a key obstacle to the proper development of competitive gas market in Serbia.

- It also negatively affects the development of a wider regional gas market, and the urgently needed gas infrastructure investments - the Reasoned Opinion reads.

- In the light of the reply by the Government, the Secretariat may submit the case to the Ministerial Council for a decision on Serbia`s compliance with Energy Community law - the EEC Secretariat warns.