Macedonia focuses on natural gas as energy priority

15/03/2010

While oil and electricity remain the mainstays of Macedonia's energy supply, natural gas is seen as the resource of the future. Proponents have been lobbying for the clean alternative to oil for more than 20 years.

By Zoran Nikolovski for Southeast European Times in Skopje -- 15/03/10

The cost of supplying all of Macedonia with natural gas is estimated at 270m euros. [Getty Images]

In an economy that relies on imported energy, government projections that Macedonia will spend nearly14% more on energy this year than in 2009 is seen as acceptably moderate. The country remains confident that it can produce more than 60% the energy needed itself and is looking to natural gas as the foundation for its needs.

While the government has allocated 383m euros to cover Macedonia's energy needs --most of which will be imports of crude oil and electricity -- about one-sixth of the energy budget will be used to buy natural gas.

Gas has increasingly been eyed as an inexpensive and environmentaly clean energy source, despite expectations of a 5% increase in the use of crude oil compared to 2009. In addition to Makpetrol and GAMA -- Macedonia's main importers and distributors of gas -- many analysts believe gas is Macedonia's energy resource of the future.

Interest in gas is not new; officials and energy experts have been discussing mass gas use for over 20 years. But use at present is only a sixth of the country's annual energy consumption.

Economy Minister Fatmir Besimi has said that building the requisite gas infrastructure is a priority. The regional pipeline projects Nabucco -- backed by the United States -- and Russia's South Stream are factored into future use.

"Through these projects, Macedonia has the opportunity to include all five or six transitional points of the pipelines," said Besimi. "Macedonia can achieve a good position because it is located in the central part of the Balkans, and this is a good opportunity to play an important role in that segment." A former Makpetrol specialist -- who spoke on condition of anonymity -- told the SETimes that "natural gas is the most economical energy source and it is a pity Macedonia did not secure funds a decade ago to gasify its entire territory."

The government says gasification across Macedonia will begin this year. Finance Minister Zoran Stavrevski, who visited Russia in December, said the agreed-on gasification projects between the two countries cleared Russia's debt to Macedonia in the amount of 44m euros.

"The study has almost been finalised. We have harmonised the text of an agreement with the Russian Ministry of Finance," said Stavrevski.

The cost of gasifying Macedonia is estimated at 270m euros. So far, the gas network has been completed from the Bulgarian border at Deve Bair to Skopje. Several larger firms in the capital, such as the huge steel plant Zelezarnica and the cement plant Cementarnica, use gas more extensively, but Skopje has no city network for smaller users.

The Ministry of Transport and Communications has announced main pipeline routes include the Klecovce-Bitola gas pipeline, which will cost 73m euros; Skopje-Gostivar, 29m euros; and Stip-Gevgelija, which cost 49m euros.

Transport ministry officials believe the network can be connected most efficiently through the Russian pipeline headed towards Greece, or via one now connecting Greece and Italy.

Money from the paid-off Russian debt will be used to build a secondary network, for consumers from Skopje to Tetovo in the west.