2026 public-investment programme and project scale
The Government of Republika Srpska has allocated €48.5mn for the proposed Šepak–Novi Grad gas pipeline, which is set to be the dominant component of its revised public-investment programme for 2026. The revised programme includes 12 priority projects with a total value of approximately €64mn. The gas pipeline accounts for almost 76% of the approved envelope.
The allocation is intended to be financed through the 2026 budget. Development is planned in several phases over the coming years.
Purpose and coverage across northern and north-western areas
The pipeline is designed to create an additional primary gas-supply route across the northern and north-western parts of Republika Srpska. It aims to extend access to households and industrial consumers that currently have limited or no connection to the transmission system.
The project’s rollout is linked to further network build-out beyond the trunk line. Municipal distribution networks, metering stations, pressure-reduction facilities and customer conversions are expected to require additional capital.
Industrial economics and fuel-switching considerations
For industrial users, the economic case will depend on the pipeline’s eventual tariff structure and connection costs. It will also hinge on how imported gas competes against electricity, coal, biomass and fuel oil.
The route could enable fuel switching in district heating, food processing, metals, manufacturing and other heat-intensive activities. However, benefits are not expected to come from construction of the trunk line alone.
Supply security and potential cost changes
The investment has supply-security implications because an additional route can reduce dependence on a single entry point. Diversification depends on where gas is sourced and on which upstream interconnections are available.
An additional domestic pipeline that continues to rely on the same external supplier is described as improving physical resilience more than commercial diversification. The initial €48.5mn allocation may not cover all system costs, as land acquisition, permitting, compressor and metering requirements, local distribution extensions and financing costs could increase the final total beyond the amount included in the 2026 programme.
Demand requirements for financial durability
The project could materially affect the energy position of north-western Republika Srpska where industrial demand is concentrated enough to support network utilisation. Financial durability will be determined by committed consumption volumes and connection density rather than by the length of pipeline constructed.
