BELGRADE, Oct 1 (Reuters) - Serbia's sole underground gas storage site, majority owned by Russia's Gazprom Neft, will be expanded to store 1 billion cubic metres of gas, one third of the country's annual gas needs, the CEO of Serbia's gas utility said on Thursday.
The Banatski Dvor storage facility can currently hold up to 450 million cubic metres of gas, enough to cover household consumption for three months.
Dusan Bajatovic, head of state-owned gas utility Srbijagas, said an agreement has been reached with a Russian partner to double the capacity of the storage at a total cost of 70 million euros ($78 million).
"We are still in the planning phase. Once the planning is complete we can finish construction in one year," he said.
Serbia imports 82 percent of its gas needs from Russia through Ukraine and Hungary, with the remainder coming from domestic sources.
Under pressure to liberalise its gas and power markets on the road to EU membership, Serbia last December adopted a plan to separate the transport and supply arms of state-owned Srbijagas by the end of June, turning it into a holding company incorporating the two units. [ID:nL6NOUAOJD}
Saddled with debts of 1 billion euros but wielding valuable political influence, the firm has for years avoided being broken up due to fears among company executives and their political overseers over the loss of market monopoly. A number of ruling party officials hold positions in the firm.
$1 = 0.8937 euros Reporting by Ivana Sekularac, editing by David Evans