The LNG terminal on the island of Krk is a strategic investment project important for Croatia's energy independence

Photo /Vijesti/2019/01 Siječanj/30 siječnja/DSC_8573.JPG

The government on Wednesday adopted a decision on financing the EUR 234 million first stage of the project of a liquefied natural gas (LNG) terminal on the northern Adriatic island of Krk.

The estimated value of the project includes a specific vessel, that is the Floating Storage and Regasification Unit worth EUR 160 million, and the construction of the infrastructure necessary for receiving, storing, reloading and regasification of liquefied natural gas, which is likely to cost 60 million euro, while the compensation for the expropriation of the land will need 14 million euro.

In 2017, the European Commission approved a EUR 102 million grant for the construction of the floating LNG terminal off Krk.

The government is to set aside 50 million euro in 2019 and 2020 each for the project.

The remaining amount of 32.6 million will be provided by the founders of the LNG Croatia company, the HEP national electricity provider and the Plinacro gas network operator.

Energy and Environment Protection Minister Tomislav Coric said that the LNG project was of strategic importance for Croatia and would contribute to the country's energy independence and security.

"The implementation of the LNG terminal should be perceived through its security component and through its geopolitical significance for Croatia and the European Union," said the minister.

The LNG Croatia company has received binding offers for the lease of 520 million cubic metres of gas from the future LNG terminal on Krk and two conditional offers for the non-binding lease of 300 million cubic metres, the company said in mid-December.

An estimated 1.5 billion cubic metres are required to make the investment in the construction of the terminal profitable.

Coric said today that the LNG Krk project remains the government's dominant energy project.

As for the lease of the capacity, two letters of intent have been sent from Hungary with queries about the possibility to enter the ownership structure of the future terminal, he added.

He said negotiations would be held with the interested side.

The government decided on Wednesday to invite bids for licenses for oil and gas exploration and exploitation in the Dinaric Alps, with Environmental Protection and Energy Minister Tomislav Coric saying it was part of the government's activities to boost Croatia's energy autonomy.

Bids will be invited for four areas covering 12,134 square kilometres in total in Karlovac, Lika-Senj, Primorje-Gorski Kotar, Zadar, Split-Dalmatia and Sibenik-Knin counties. Exploration is to last five years. It excludes national parks and areas off the coast and the Bosnian border.

The tender will be advertised by the Croatian Hydrocarbon Agency and the bids will be assessed by a commission to be appointed by Coric. At his ministry's proposal, the government will decide on the issue of an exploration and exploitation license for each of the four areas for a maximum 30 years.

The exploration in the Dinarides is aimed at reducing the fall in gas and oil production in Croatia, the government says.

Coric said the exploration would be conducted under the strictest ecological standards and in communication with local communities. Recently he said the exploration in the Dinarides would not harm tourism development.

The government also decided to sell oil products from strategic commodity stockpiles.

Text: Hina