Russian Gas Flows to Serbia Return to Normal

Serbia's prime minister said Russian gas shipments to his country had returned to normal following talks last week with the Russian president over debt repayment to gas giant Gazprom, local media reported.

Late in October, the Serbian government said the country's gas debt of $224 million was the reason for a 28 percent reduction in gas supplies from Russia. Supplies first fell in late September..

"There are no problems with gas shipments any more," Aleksandar Vucic was quoted as saying by the Tanjug news agency.

Separately, Energy Minister Aleksandar Antic said an agreement on gas debt repayment could be signed next week.

He said Serbia could pay the $224 million in three tranches -- $100 million by the end of 2014, $100 million in 2015 and the rest in 2016.

Antic also said Serbia had given up its plans to reserve 200 million cubic metres (mcm) of gas in neighbouring Hungary for the coming winter because its Russian partners had provided assurances supplies would be stable.

Serbia consumes about 2.5 billion cubic metres of gas per year and relies mainly on Russian supplies via Ukraine and Hungary.

The EU candidate country put its oil and gas sector largely in the hands of Gazprom in 2008, in a deal that allowed Gazprom's oil arm Gazprom Neft (SIBN.ME) to acquire a majority stake in state-owned oil firm NIS.

Gazprom is the majority shareholder in Serbia's sole gas storage facility with a capacity of 450 mcm.

(Reporting by Maja Zuvela in Sarajevo; Editing by Dale Hudson)