Croatia Resurrects LNG terminal Plans

Posted by Joseph Keefe November 4, 2014

Croatia prepares financial plan for LNG terminal; EU sees the Krk terminal helping Europe's energy independence.

Croatia has reopened a feasibility study for a liquefied natural gas (LNG) terminal in the northern Adriatic which should help diversify energy supplies for central Europe, economy minister Ivan Vrdoljak said on Tuesday.

The idea is to make the terminal on the island of Krk the southern end of a gas pipeline corridor connecting Croatia and Poland's Baltic port of Swinoujscie to help diversify gas supply routes for central Europe and cut dependence on Russian imports.

"The potential LNG terminal on Krk has been recognised by the European Commission as an important project for the European Union's energy independence. Hence, we have received funds to help us prepare the necessary documentation and its financial feasibility," Vrdoljak told reporters.

Croatia aims to determine next year which countries and companies might be interested to share the construction costs.

The terminal's tentative value is seen around 600 million euros ($750 million) and its capacity at between four and six billion cubic metres (bcm) of gas.

Croatia, which joined the EU last year, currently consumes 2.7 bcm of gas annually and produces 60 percent of its gas needs. It has this year launched tenders for oil and gas on- and off-shore exploitation.

"We do not need the terminal's considerable capacity just for ourselves. My personal opinion is that the state should not have more than 25 percent in the project," he said.

Plans for an LNG terminal at Krk have been on the table for more than a decade.

An international consortium pushing a similar terminal project halted its implementation a few years ago due to Croatia's slowness in issuing relevant permits and lower gas demand in Europe following the global crisis in 2008.

This time Croatia's project has support from Washington.

"We hope that an LNG terminal will eventually be built here," U.S. Ambassador to Croatia, Kenneth Merten, told Reuters last month.

"In our analysis, that will be very useful, not only for Croatia but for all of its neighbours ranging from Poland to Bosnia, Macedonia. We think there is great potential there, including for Ukraine too," Merten said.