Croatia is positioning itself as a regional gas hub, but interconnections that could allow the country to fulfil this role are still years away from construction and would need considerable investment.
Croatian prime minister Andrej Plenkovic recently announced an increase in the Krk LNG terminal's capacity to 6.1bn m³/yr from 2.9bn m³/yr. This expansion would put its capacity "far above the needs of the Croatian economy and households", enabling the country to become a regional energy hub, importing and transporting gas to neighbouring countries, the prime minister said. But Plenkovic provided no timeline for the planned expansion.
And an upgrade at Krk alone is not enough, as sufficient pipeline connections will be needed to export this gas. Plans to increase Croatia's interconnectors so far have been vague and non-committal. Serbian president Aleksander Vucic recently expressed an interest in building an interconnector with Croatia, but said that at prevailing prices, LNG delivered at Krk is far more expensive than pipeline gas from Russia, hinting at limited economic viability for the project.
And there has long been talk of constructing an Ionian Adriatic pipeline, which would connect Croatia — through Albania, Montenegro and Bosnia — to the Trans-Adriatic Pipeline, giving the country access to Azeri gas. But this project has never got off the ground, even after several countries secured EU funding for it.
The Hungarian and Croatian system operators recently announced a non-binding market survey to assess interest in increased capacity at their shared border, but again no timeline was given for the expansion. Similarly, Croatia and Slovenia plan to boost the gas interconnection capacity between their countries, with "considerable EU funding" available to help central and eastern European countries diversify supply away from Russia, former Slovenian prime minister Janesz Jansa said. Here too, however, there was no timeline given.
But such interconnection projects are "required" if Croatia wishes to become a regional energy hub, chief executive of Hungarian utility MVM's Croatian subsidiary, Marjan Vugrinec, told Argus. Interconnectors would "increase market liquidity and can have a positive impact on market competition", Vugrinec said. Croatia will require reform and investments in the domestic grid, too, in order to facilitate the increased sendout, he said.
Alongside developing its presence on the Croatian domestic market, MVM's Croatian subsidiary is interested in booking additional capacity at other LNG terminals, and not just in southeast Europe, its chief executive said. The MVM group as a whole plans to expand its presence in the wider region, targeting Austria, Slovakia, the Czech Republic, Croatia, Serbia and Romania.
The firm would also be interested in booking more Krk capacity, if and when it becomes available. Related to this, it is looking to expand further into the trucked LNG market, after Krk made the service available in April. This service enables the firm to reach customers not connected to the transmission system and directly supply industrial users. While terminal operator LNG Hrvatska plans to construct a bunkering station to expand the ship-to-truck service, this again has no concrete timeline or location.
