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Croatia talks up regional gas hub plan

  • Market: Natural gas
  • 24/03/23

Croatian prime minister Andrej Plenkovic has reiterated his country's aim to become a regional gas hub, although plans are still at an early stage and EU funding has yet to be secured.

"Croatia can contribute to the diversification of energy sources for the countries of eastern and central Europe" because of its geographical position, Plenkovic said earlier this month. He added that Croatia must "increase strategic investments, ensure that economic competitiveness is high and... reduce vulnerability, especially in the energy sector".

Following the planned expansion of Croatia's 2.25mn t/yr Krk LNG terminal — doubling its regasification capacity to 6.1bn m³/yr from 2.9bn m³/yr — the country's import capacity will far exceed domestic consumption, which fell to 2.5bn m³ last year, according to Eurostat data.

Building an additional regasification module on Krk's floating storage and regasification unit should cost no more than €30mn-35mn, with the additional capacity hopefully available from the fourth quarter of 2025, operator LNG Hrvatska said last month. Croatia's grid must also be expanded to receive additional gas from the terminal, the operator said. Construction of a pipeline between Zlobin and Bosiljevo should increase grid capacity and facilitate higher exports to neighbouring countries.

But grid upgrades are only likely to enable transmission of roughly 5bn m³/yr from Krk, as the full 6.1bn m³/yr would be technically difficult to accomplish, according to LNG Hrvatska.

Hungarian and Slovenian companies indicated strong interest in the additional capacities, said the operator, which has also had talks with firms in Italy and Germany. LNG Hrvatska said it is likely to hold an open season for the capacity next year. Slovakia has also expressed interest in booking Krk capacity.

Croatia has held high-level meetings with Slovenian, Austrian and German officials about potential exports, with Plenkovic saying in November that "we would like to build a gas pipeline through Ljubljana and Salzburg all the way to Bavaria". He later reiterated this plan, saying the governments should apply to the European Commission for funding.

Croatia is "focused on development of the REPowerEU plan's identified projects", transmission system operator Plinacro told Argus, adding that Krk's expansion, pipelines towards Slovenia, Hungary and Bosnia and Herzegovina, and the Ionian-Adriatic Pipeline (IAP) are all part of this.

Agreement was reached recently to build an interconnector to Bosnia and Herzegovina, scheduled to be completed in 2024, according to Plinacro, which said building permits could be issued in the first half of this year.

This would form the first section of IAP — a 520km route connecting Albania, Montenegro, Bosnia and Herzegovina and Croatia to the Trans-Adriatic Pipeline. But IAP is not expected to be completed until 2028, Plinacro told Argus, several years behind the previous target of 2025. In late December, Montenegro's competition authority proposed allocating €20,000 to system operator Montenegro Bonus to establish an IAP joint venture with counterparts Plinacro, BH Gas in Bosnia and Herzegovina and Albgaz in Albania. But no progress on IAP seems to have been made since then.

Former Slovenian prime minister Janez Jansa said last year that there were plans to increase capacity towards Slovenia and that there is "considerable EU funding available" for projects aiding diversification of gas supply away from Russia.

Despite no interest being expressed in additional capacity on the Croatian-Hungarian border, the REPowerEU document cites enhancing transmission capacity towards Hungary as an important step in supply diversification.

Completion of these projects would allow Croatia to transmit regasified LNG across the region and act as a transit country. But this is still years away, and little progress has been made on most routes, particularly IAP, which has been stalled for years. And the projects are reliant on EU funding that has yet to be secured, although it should be available.


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