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NEWS 09 Feb 18

Bosnian Capital Faces Threat to its Gas Supply

A Bosnian Serb energy company is threatening to cut off gas supplies to the capital, Sarajevo, in a dispute over gas transport prices.

Danijel Kovacevic
BIRN
Banja Luka
Sarajevo. Arcive photo: Wikimedia Commons

An energy company in Bosnia's mainly Serbian entity, Republika Srpska, has threatened to suspend delivery of gas to the city of Sarajevo by the end of February, unless an agreement is reached on prices.

Its dispute is with the energy company BH-Gas, which is owned by the Federation of Bosnia and Herzegovina, Bosnia's other entity.

If this happens, the city over over 275,000 inhabitants could be left without heating in the middle of a cold winter. Gas in Sarajevo is used, among other things, to heat households.

Bosnia has no state-level law regulating gas transport prices.

But a law on gas in Republika Srpska, adopted in 2015, stipulates that companies in the other entity must pay for gas transportation through Republika Srpska.

The pipeline that brings gas to Sarajevo crosses the RS. About 40 km of gas pipeline cross the east of the country between Zvornik and Kladanj, managed by Sarajevo-Gas, a company based in East Sarajevo, which is in the RS.

Slavo Krajisnik, CEO of Sarajevo-Gas, said that if BH-Gas does not accept a compromise price by the end of next week, delivery of gas to Sarajevo will be suspended.

"We will announce the exact date of the suspension of gas deliveries. We will then publish all the reasons and explanations for why this happened," Karisik said on Thursday.

A warning letter has been sent to BH-Gas, the Federation entity government, the state Ministry for Foreign trade and the Energy Community in Vienna.

"Sarajevo-Gas reluctantly approaches a breakdown in natural gas transportation because there will be a complete break in the supply of natural gas consumers in Bosnia – but we are forced to do this, having tried for almost three years to solve the problem in a peaceful and normal way," Krajisnik said.

However, BH-Gas told BIRN that they owed nothing to anyone. "The fact is that BH-Gas does not owe even one US dollar to the gas supplier or for the transportation," BH-Gas's CEO, Jasmin Salkic, told BIRN.

Meanwhile, the Federation's energy, mines and industry minister, Nermin Dzindic, on Thursday told the company to sort out its obligations.

"If [BH-Gas] it does not settle its debts and what was agreed in 2015 within 30 days, the management of BH-Gas will be removed," he said.

Dzindic said BH-Gas had not paid its previously agreed obligations to the company in East Sarajevo after the latter unilaterally increased the gas transport price.

"I accept that BH-Gas management cannot accept such an enormous increase without explanation – but I do not accept that they have ceased to pay a contractual obligation," he said.

"We have given a deadline to the management to correct its shortcomings within 30 days; if it does not, we are ready to make a move and replace the BH-Gas management," Dzindic said.

His colleague, the RS minister of industry, Petar Djokic, on Thursday said the two companies must solve the problem – not least because if Sarajevo-Gas stops the supply of gas to Sarajevo, part of the RS will be left without gas as well.

BH-Gas said the other company had sent a final proposal, which might prevent the suspension of gas transportation, but did not specify what the proposal said.

Few citizens of Sarajevo believe that the gas supply will be interrupted completely, because the alternative is hard to imagine.

"They have to find some sort of solution. A bas shortage, freezing of hundreds of thousands of people, is not an option. I hope they are not even thinking about it," Samir, an economist from Sarajevo, said.

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