Russia’s Gazprom Neft and its local subsidiary NIS have expressed interest in the local petrochemical unit HIP-Petrohemija, and in the forthcoming period talks with the prospective buyer will intensify, Serbian Energy Minister Aleksandar Antic said after a meeting in St. Petersburg with representatives of Gazprom. The two discussed higher natural gas imports amid robust industrial growth in Serbia and further expansion of Gazprom’s subsidiary NIS, as well.

HIP-Petrohemija JSC is the largest producer of petrochemicals in Serbia and an important company within chemical industry of Southeast Europe.

A Kazakh petrochemical company is also interested in HIP-Petrohemija, as announced by President Aleksandar Vucic during his visit to Astana last June. Vucic didn’t reveal the name of the company.

The Serbian Ministry of Economy issued in March 2017 a public call for letters of interest for three state-owned chemical plants, including HIP-Petrohemija. The government hoped Russia would be interested in the three companies, especially in HIP-Petrohemija, since Serbian oil company Naftna Industrija Srbije (NIS), controlled by Russian Gazpromneft, was HIP-Petrohemija's largest creditor (the debt was paid by the government later in the year). The main raw material used by Petrohemija is petrol produced by the NIS refinery in Pancevo.

Antić pointed out that Petrohemija is in profit, but that it needs a strategic partner for investments. Firstly, it needs to invest in the production line for polypropylene, which would ensure that Petrohemija remains stable in the long run, in all economic conditions, regardless of the possible turbulence in relation to the world oil price, said Antić.

He also said he had very successful talks with Gazprom chairman Alexei Miller and president of Gazprom Nefte Alexander Djukow about joint projects and investments. In regard to the natural gas imports, they discussed the option of increasing the storage capacity of Serbian deposits located at Banatski Dvor.

Antić said he talked about strengthening the gas transportation system of Serbia, first of all, from Bulgaria to the Hungarian border and on the very important issue of increasing the capacity of Banatski Dvor. Serbia received a firm promise that the Russian side, Gazprom and Gazpromexport, will finish the study and make a technical decision about the storage capacity.

He also said that he talked with Djukov about NIS, with the primary goal of developing it as a leader in the Western Balkans region. According to the minister, the aim is to continue with the investment cycle and under these circumstances he mentioned the Deep Processing Unit, an investment worth €300mn. NIS is also developing a thermal power plant at Pancevo.