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Serbian premier Aleksandar Vucic and Russian President Vladimir Putin have agreed that Serbia can repay its $224mn gas debt in three instalments, with the first $100mn due by end-2014, daily Novosti reported, quoting unofficial sources.

The second instalment of $100mn will be paid by the end of 2015, and the remaining $24mn in 2016, the report said.

The government's press office announced that Vucic and Putin reached an agreement late on November 5 on the terms of the Russian gas supply and the model of the repayment of Belgrade's gas debt to Moscow but did not elaborate.

The press office also said that Putin accepted Vucic's request for favourable gas supplies to three big Serbian chemical plants. According to Novosti, the three companies are Petrohemija, Azotara and Kikinda-based Metanolsko-Sircetni Kompleks.

The agreement on the debt repayment comes less than a week after local media reported that deliveries of Russian gas to Serbia had been cut by 28% because Vucic failed to sign a protocol on Serbia's debt repayment during Putin's visit to Belgrade in October.

Initially, Serbia was supposed to pay the full $224mn amount by March but Vucic insisted this would put an extra pressure on the budget deficit and public debt at a time when the government is striving to stabilise its fiscal imbalances and convince the IMF it is fit to qualify for a new funding programme.

Novosti speculates that Moscow's sudden wish that Serbia quickly repay its old gas debt is linked with Russia's political interests than with its economic ones. Therefore, the reason for the reduced gas supplies and the debt repayment demand is probably linked with the delay in the start of the South Stream pipeline construction in Serbia, which is seen as Belgrade's silent support to the EU's stance on the project.