Overview

Plans for an LNG terminal on Croatia's Adriatic coast have ground to a halt in recent years, with an international consortium all but scrapping its planned investment in a facility on the island of Krk.

The original plans – which would have seen a consortium of E.On, Total, OMV and Slovenia's Geoplin build a terminal to satisfy regional demand – have been replaced by a state-backed scheme. In 2012, this was envisaged to include transmission system operator Plinacro and power company HEP making an investment of more than €600 million ($805 million) in the Hrvatska LNG project, with a capacity of up to 5 billion cubic metres.

However, with the Trans-Adriatic Pipeline due to bring Caspian gas through the Balkans by the end of the decade and Zagreb courting new large-scale investment in its indigenous gas reserves, it is unclear whether such a large-scale terminal for a country that already produces more than 60% of its annual demand is economically justifiable.

In a statement emailed to Interfax by Plinacro's management in 2012, the company saw a small-scale option as being more realistic than the original Adria LNG plans. “The global economic crisis has resulted in questioning the justification of investing in a project of such a huge capacity, which is at this point seen as too optimistic and the construction of which is not anticipated in phases,” Plinacro said.

“Since there was no willingness for redesigning the project, interested partners have decided to put it to a standstill... Plinacro is offering a financially more acceptable project, adjusted to market needs, and... acceptable due to the possibility of phased construction,” The email added.

Little progress has been made towards construction since 2012, but government officials insist EU funding will contribute to the final cost. Latest estimates put the project’s onstream date as 2019 at the earliest. Once complete, it would be the southern terminus of the North-South Gas Corridor initiative promoted by the EU.

Page updated: 07/08/2014