Serbia plans to invest 105 million euro ($144 million) in the construction of its second underground gas storage, local media reported, SeeNews said.

The European Bank for Reconstruction and Development will lend Serbia 75 million euro towards the project and gas monopoly Srbijagas will dish out the remainder, Belgrade-based broadcaster (www.b92.net) quoted the head of Srbijagas Dusan Bajatovic as saying on Saturday.

The construction of the Itebej gas storage will require the construction of an additional pipeline, Bajatovic said. The first phase of the construction of the pipeline will be completed by the end of next year.

Itebej is part of Serbia's plan to wrap up its gasification programme by 2015, when the construction of the Russian-backed South Stream pipeline should also be completed, Bajatovic said. Gasification extracts energy from carbonaceous materials, such as coal, petroleum, biofuel or biomass. Serbia is short of 450 million euro to complete the gasification, Bajatovic added.

Itebej and Banatski Dvor will store a combined two billion cubic metres (cu m) of natural gas. Banatski Dvor will be filled by 820 million cu m by the end of 2010, Bajatovic said earlier.

The South Stream gas pipeline, estimated to cost some 10 billion euro, is designed to carry some 63 billion cubic metres of Russian gas yearly to Western Europe under the Black Sea. The undersea section will begin in Russia and would come ashore at the Bulgarian Black Sea of port of Burgas. The onshore section will then stretch from Bulgaria via Greece to Italy in the south and will branch out to Austria in the north.