How Two Separate Gas Networks Are Destroying Bosnia and Herzegovina: De Facto Division of State Property Through Entity Gas Pipelines

By: Dr. Zlatko Hadžidedić, Professor of International Relations

A key law has recently been passed that will forever change the energy map, but also call into question the very existence of the state. What is presented as 'diversification', 'decarbonization', and an 'obligation towards global energy policy' is actually a planned division of state property, a de facto creation of two entity states, and the shutdown of domestic electricity production.

1. Will Sarajevo Be Left Without Gas?

Gas was brought into Bosnia and Herzegovina in the 1980s when the regions of Sarajevo and Zenica were gasified. The existing gas pipeline came from the direction of Serbia, via Zvornik, and this is, for now, the only gas pipeline entering BiH.

However, as of April 17, 2026, following the signing of an agreement by the company Sarajevogas - Istočno Sarajevo, this gas pipeline will be rerouted towards the northern part of the RS entity, along the Zvornik - Banja Luka - Bosanski Novi route.

Therefore, after the gas pipeline is built on the territory of the RS entity, the Sarajevo and Zenica regions will be left without natural gas from the east, as this gas pipeline simply does not have the capacity for both routes. In other words, Banja Luka has been given priority, while the capital city and the industrial center of Zenica will be left without a basic energy source.

2. Where Does the State Fit In?

To prevent such things from happening, the Dayton Agreement, in Annex 9, stipulated the formation of state-level corporations, where only the state has the jurisdiction to decide on the construction of public transport infrastructure, which includes gas transport.

However, instead of insisting on state competencies, by adopting the Law on the Southern Interconnection in the Federation of BiH, the state-level transport of gas is being abandoned, and this issue is being reduced to the level of the FBiH entity. This, in turn, gives the RS entity a "green light" to do the same – establish sovereignty over the existing gas network and reroute the old gas pipeline in a new direction, in line with its separate interests.

This is called dividing the state on the ground. Because the project will also be used to appropriate state property by the entities, contrary to the rulings of the Constitutional Court of BiH.

3. Why Is the Southern Interconnection Being Built?

The narrative that the Federation of BiH must build the Southern Interconnection before 2028, because the ban on importing gas from Russia will take effect then, is, according to energy sector experts, a complete deception.

The eastern gas pipeline via Zvornik is already connected to the so-called TurkStream, Bulgaria, and Hungary, so gas can still be obtained from that direction, and it doesn't have to be Russian, but can be Azerbaijani or Kazakhstani, which is a matter of strategic and market choice for the user – the state of Bosnia and Herzegovina.

If it were necessary to secure gas for other parts of BiH from the same direction, besides the Sarajevo and Zenica regions, a state-level decision should have been made to increase the capacity of the Eastern Gas Pipeline. Instead, the Federation has embarked on building a completely new, incomparably more expensive route. And no one is answering the simplest question – where is the economic, and where is the strategic calculation in this?

4. Instead of Cheap Electricity from Thermal Power Plants - Expensive Electricity from Private Gas Power Plants

After Dragan Čović blocked the law by which the Southern Interconnection project was to be carried out by BH-Gas (a public enterprise owned by the Federation of BiH), this project has been assigned by the new law to the newly established private American company AAFS. We will set aside the question of the (un)constitutionality of legally assigning a monopoly to a private foreign company, and focus on the direct strategic consequences of such a decision.

In short, according to energy sector experts, the plan to introduce the Southern Interconnection entails the planned shutdown of two thermal power plants of Elektroprivreda BiH, in Kakanj and Tuzla, with the installation of two private gas thermal power plants of the same capacity. Under the guise of 'decarbonization', Bosnia and Herzegovina will cease to be an electricity producer and become exclusively a consumer.

And then, the citizens of the Federation will face a financial shock. Liquefied natural gas (LNG), which arrives by ships from the United States and other countries to the terminal in Krk, Croatia, is many times more expensive than gas that arrives via pipeline from the east.

However, in addition to the increase in the retail price of gas, electricity from new private gas power plants (which will replace the Kakanj and Tuzla Thermal Power Plants) will also, at the production cost, be at least 4 to 5 times more expensive than the current retail price.

Of course, the owners of private gas power plants will also collect their share in production, so the price of electricity will very likely be at least 6 times higher than before. And then, industry will become uncompetitive – factories will shut down, workers will lose their jobs. And a social crisis will be inevitable.

5. RS Builds with Its Own Capacities, FBiH Entrusted to a Foreign Company

The RS entity is building the Zvornik - Bosanski Novi gas pipeline with its own capacities, while the Federation of BiH is prevented from doing so by the aforementioned law, leaving everything to a private foreign company.

If the Federation of BiH urgently needs to build the Southern Interconnection because gas will no longer come from the east, how can the RS entity simultaneously develop a gas pipeline directed precisely towards the sources from the east, while appropriating the capacities built by Energoinvest in the 1980s?

The answer is simple: it is about the planned division of state property, and consequently, the division of Bosnia and Herzegovina.

6. De Facto Division of State Property

What is hidden behind all of this is the de facto division of state property between the entities – without a single explicit law that would resolve the issue of state property de jure.

Because the basic rule of property law states: the land on which a structure is built shares the fate of that structure. If the state builds a gas pipeline, the land beneath it remains state property. But if an entity builds a gas pipeline – either independently or through a private partner – then, in practice, it is considered that the land has also become entity property.

The RS gas pipeline (Zvornik - Banja Luka - Bosanski Novi) will extend for hundreds of kilometers through the northern part of BiH. Every centimeter of that route becomes 'RS entity property'.

The Federation's gas pipeline (Southern Interconnection) will pass through Herzegovina and central Bosnia. The same story: the land becomes 'federal property', not state property.

No one has passed a law on the division of state property. No one has amended the Constitution. Only the Parliament of the Federation of BiH has passed a law on the construction of gas pipelines. And as the pipeline is being built, the land under the pipes will quietly transfer from state to entity domain.

When someone draws a line on the map at the end of this process, they will see that in the north there is a gas network connected to Serbia, and in the south a gas network connected to Croatia – and that these two networks have nothing to do with each other. This is the map of two states, one of which will most likely be annexed to Serbia in the future, and the other to Croatia.

7. Destruction of the State and Living Standards

All of the above indicates that the Southern Interconnection is a project that will destroy the state, because instead of a unified state gas network, two separate entity networks are being built, thereby quietly dividing state property, and BiH ceases to be a unified sovereign territory.

Furthermore, this project will destroy the living standards of citizens in the Federation of BiH, as citizens of the Federation will pay 5-6 times more for electricity, lose jobs in industry, and it is possible they will also be left without gas for basic household consumption.

Only the Party for Bosnia and Herzegovina, with its two votes in Parliament, opposed this. All others voted not to offend those who imposed the Southern Interconnection project and whom – rightly or wrongly – they perceive as 'world powers'. By doing so, they also voted for the division and ultimate destruction of their own state.

Is It Already Too Late?

All circumstances suggest that the Southern Interconnection project is motivated by the shutdown of domestic power plants and the introduction of private monopolies, as well as the division of state property and the ultimate division of the state. In doing so, citizens will also pay an additional price – electricity five to six times more expensive, along with an economic collapse and job losses.

There is one Bosnia and Herzegovina, and it needs one, unified gas network. If we divide it through two separate gas networks, it will cease to exist. With this project, slowly but surely, the latter option is being implemented. Only one, more rhetorical, question remains – will anyone stop this before it is too late?

Of course, the Constitutional Court can still challenge and overturn the Law on the Southern Interconnection, and has legal obligations to do so. But – can legal obligations influence the political will of those who sit on that court as representatives of the political options that appointed them and who voted for this law?