Croatia Sees Krk LNG Terminal Construction Start-Up by Mid-2016
Croatian authorities have announced that the construction of the LNG terminal on the Island of Krk in the Adriatic Sea should begin mid-2016.
The construction period would be three years with the terminal operational by in 2019, according to Mladen Antunovic, Director of LNG Croatia.
"LNG terminal on the island has become a European strategic project, has been included in the European list of projects of strategic interest and further accentuated in the European energy security strategy, where only 33 projects are from gas business. Our LNG terminal has absolutely all the priorities at EU level," said Antunovic, adding that this is the third lucky attempt because the construction of the terminal for the first time was prevented by war, and once by the economic crisis. He claims that funding is now available, not only from the EU but also from investors who are willing to invest in such a project.
Antunovic added that the terminal should be complimented by the construction of high efficiency gas-fired power plant nearby.
"We plan to make highly efficient co-generation power plant near the terminal, perhaps a smaller capacity of 40 megawatts. We are about to move with the technological elaboration of such a decision, since it is a European practice," said Antunovic.
However, some experts call for caution in Antunovic's optimism.
At the recent 30th International meeting of gas experts in Opatija, Miljenko Sunic, president of the Croatian Gas Association, said that the start of construction of an LNG terminal on the Island Krk next year does not seem realistic, given the documentation and obtaining all that precedes the beginning of construction.
However, Sunic, together with the director of Department of Strategic Development Plinacro Vladimir Djurovic, believes that this time the preparation for the construction of LNG terminals is most advanced, compared to the previous two attempts.
Sunic noted that the construction of the LNG terminal is not only an economic but also a political issue, and that will depend on political decisions not only on the level of Croatian, but of the whole EU which is focused on the reduced dependence of the European market on imports of Russian gas.
"The fall of the construction of South Stream updated the importance of the LNG on Krk. The terminal on Krk should be connected by pipeline to the LNG terminal in Poland and thus cover a good part of the EU market, but if it indeed will be built that is something I would like to know, also," said Sunic.
Director of the Department of Strategic Development at Plinacro, Vladimir Djurovic, states that the LNG project is at an advanced stage.
"The project is very close to issuing the location permit. However, currently happening is a non-binding test of the market, within which are sent queries to all potential key customers in the region about their interest in gas from the LNG terminal," said Djurovic.
There are other issues regarding the implementation of this energy project for which the European Union has approved initial funds for preparatory studies in the amount of EUR 4.9 million from the fund CEF - Connecting Europe Facility.
Professor Igor Dekanic of Mining, Oil and Geology Faculty in Zagreb, points out possible insistence of the EU on economical feasibility of the whole project as one of the important issues. Croatia, he stressed, will not invest in the project, it will only prepare the best international standards so as to be attractive to private capital.
LNG Croatia's Antunovic said that the first step in the realization is not to find investors but will primarily seek to sell the final product, which will be terminal capacities.
'If we have sold capacity in a greater or lesser extent, then we will attract investors more easily and under much better conditions. By the end of May, companies have the ability to express a non-binding interest in the project, and then goes the negotiation process about the contract," said Antunovic, who is satisfied with the overall timetable and interest in the project.
He revealed that the capacity of the terminal will be six billion cubic meters of gas, but was scalable if initial requirements were less.
Kruno Kartus
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