Serbia and Azerbaijan signed an agreement in Baku on Wednesday under which some 400 million cubic meters of gas from Azerbaijan should be delivered per year to Serbia from 2024 onwards.

Serbian Minister of Mining and Energy Dubravka Djedovic Handanovic and Azerbaijan Minister of Energy Parviz Shahbazov signed a Memorandum of Understanding which, according to the Serbian ministry press release, “deepens relations in the field of energy”. A commercial contract between Serbian state-owned Srbijagas and Azerbaijan’s SOCAR was signed at the same meeting.

The Serbian ministry said that, according to the deal, Azerbaijan should deliver up to 400 million cubic meters of gas per year until 2026, and a billion meters a year after that.

Azerbaijan’s Energy Minister said: “We are laying the foundation for multifaceted cooperation in the field of gas, including gas supplies from Azerbaijan to Serbia for the first time.”

“Serbia is Azerbaijan’s new partner in diversifying the gas market in Europe. With the supply of up to 400 million cubic metres of gas per annum to Serbia, the number of countries supplied with Azerbaijani gas will reach eight,” Shahbazov said, Azernews news agency reported.

Djedovic Handanovic said that when construction of the gas interconnection with Bulgaria is completed Azerbaijan will be another gas supplier for Serbia.

“After the completion of the Balkan Stream gas pipeline, which has provided additional security and opened a new direction of supply, we are now achieving the strategic goal of diversifying suppliers and additionally strengthening our position as a transit country for gas supply to Central European countries,” Djedovic Handanovic said in a press release.

The deadline to finish the gas interconnection, financed by the European Union, expires at the end of this year.

Djedovic Handanovic also said the signed Memorandum “opens up other possibilities for cooperation between the two countries, which concern the delivery of liquefied natural gas via LNG terminals in Turkey and Greece, as well as potential cooperation on the development of capacities for the construction of gas power plants and gas storage facilities”.

Currently, Serbia imports almost all of its gas from Russia’s energy giant Gazprom, with domestic production covering only roughly 15 per cent of its needs.

The last long-term contract with Gazprom expired at the end of 2021. In November 2021 the Serbian and Russian presidents agreed that, for the next six months, Serbia would continue to pay $270 per 1,000 cubic metres of natural gas. In May 2022 in a telephone conversation they agreed that a new three-year deal would be signed.