Serbia seals gas deal with Russia

BELGRADE (AP) – Russia signed a gas pipeline deal with Serbia yesterday that underscores Moscow’s increasingly closer ties with Belgrade. The plan clears the way for the construction of the South Stream pipeline through Serbia en route to Western Europe. Details of the deal – expected to be worth as much as $1.5 billion (-1 billion) were to be released later yesterday. The deal is the centerpiece of a visit by Dmitry Medvedev, the man widely expected to be Russia’s next president. Medvedev said the agreement and other related deals «form the foundation of energy stability for all of Europe in the future.» The accord was signed by Alexei Miller, chief executive of Russian gas monopoly OAO Gazprom, and Sasa Ilic, the acting head of Srbijagas, Serbia’s natural gas monopoly. Later yesterday, Medvedev was due to go to Hungary to discuss gas arrangements with government leaders there, officials said. Before leaving, Medvedev also toured Serbia’s oil refinery in Pancevo, just outside Belgrade, where he said that a deal to buy Serbia’s state oil company, NIS, will also be signed soon. Purchase of the majority stake in NIS by Russia has been agreed upon as part of the overall energy deal with Serbia that also includes building of the pipeline. Russia offered -400 million, with an additional -500 million to modernize the rundown company – a price government critics say is too low. Though Medvedev’s visit has focused on economic issues, his talks with President Boris Tadic and Prime Minister Vojislav Kostunica also dealt with the tensions caused by Kosovo’s declaration of independence from Serbia. Moscow has emerged as Belgrade’s primary ally in the Kosovo crisis. The United States and some European Union nations quickly recognized Kosovo’s declared statehood last week, but Moscow declared the move illegal and warned that it will block efforts to get the new nation to join the United Nations or other international organizations. Russian President Vladimir Putin has said Kosovo’s declaration represents «a terrifying precedent,» and warned the West that the decision would »come back to knock them on the head.» Medvedev said in Belgrade that «all such declarations violate the international system of security and the system of international law that the world has built in the past 100 years.» He added that Kosovo’s independence declaration «absolutely» violated international rules. Moscow and Serbia will «coordinate» their future moves in the crisis, he said. «Serbia needs support now,» Medvedev said. Serbian officials praised the Russian stand. President Tadic, in a statement, thanked Russia for its backing, while Prime Minister Kostunica said Serbia and Russia would continue to coordinate their policies. Medvedev is being accompanied by Russian Foreign Minister Sergei Lavrov. Diplomatic officials in Belgrade said Medvedev’s statements will be watched closely for indications of Russia’s foreign policy after Putin steps down in May. Several dozen supporters of the pro-Western Liberal Democratic Party, meanwhile, held a protest in front of the Russian Embassy over recent comments on Moscow state television criticizing Serbia’s slain reformist Prime Minister Zoran Djindjic. The party activists tried to hand the embassy a letter for Medvedev, demanding that he denounce the anti-Djindjic comments, but the police said no one was there to take it. The Beta news agency later reported that Medvedev distanced himself from the disputed comments in remarks made during the meeting with Tadic.