LNG sets the Balkans ‘on fire’

LNG sets the Balkans ‘on fire’

Not even six months have passed since the day of the EU’s announcement in December 2017, that it intends to finance the construction of a liquefied natural gas (LNG) terminal in Krk, Croatia, with EUR 101.4 million, for the energy security of Central and South-East Europe, as well as the parallel announcement by Russian Gazprom that it intends to finance EUR 70 million for the construction of a LNG plant in Zvornik, Bosnia and Herzegovina.

This is a small example of the tough competition underway to control gas flows in the Balkans. At the same time, the attempt by the U.S. to export the quantities of shale gas in LNG form to Europe is in full swing.

Non-existent cross-border connection…

Through certain documents, the EU supports the feasibility of building LNG units in Greece as well as in Croatia, Bulgaria and Poland. It notes, however, the problem is that the network of energy interconnections of SEE countries is currently incomplete. This is why particular attention is being paid to the completion of, for example, the Greece Interconnector (IGB).

However, the ambition to become the gateway to Poland and Lithuania of U.S. LNG in SE Europe is claimed by Greece, Croatia and Bulgaria, with Washington openly expressing its “full and absolute support” for both its work Floating Storage Regasification Unit (FSRU) and the terminal on the island of Krk, Croatia.

Sofia, for its part, plans to work with Qatar to build either LNG or CNG (Compressed Natural Gas) infrastructure with the involvement of state-owned operators on both sides, to import Qatar gas.

Environmental disaster

However, the transformation of the island of Krk in Croatia into a LNG terminal has caused a variety of domestic reactions, mainly on the part of local residents who have expressed their deep concern about the conversion of Kvarner Bay into a new industrial zone, resulting in the destruction of the marine environment and the removal of the area from the tourist map of an island of 19,000 inhabitants, which in summer attracts up to 190,000 tourists, mainly from Germany.

For the operation of the gas plant, it is necessary to use chlorine, causing the bodies and residents to complain that the Kvarner bay will turn into a swimming pool… and state that if the government does not re-examine the issue, they will proceed to mobilisations…

Waiting for shale gas…

In any case, the question that one may ask is whether Croatia needs this station as the U.S. LNG may be late. Until then what will the unit be “filled” with?

In a statement, LNG Croatia, the state company that runs the project, reports that it is proceeding to a new competition with a closing date on June 8 for the construction of the floating storage and regasification unit (FSRU). And this, as pointed out, was forced to cancel the previous tender, as the project had to be re-evaluated. Local media report that interest in the first phase of the competition has been limited…

“It was necessary to revise the technical characteristics and capacities of the initially requested FSRU to reduce the initially planned capital costs of the project and enable the realization of the project with a lower capacity booking”, LNG Croatia said without providing any additional information.

The initial capacity of the LNG facility was 2.6 billion cubic metres of gas a year with a planned start-up date in 2020.

The Krk LNG import project would be developed in two phases. The first phase includes setting up of the FSRU while the second phase entails the construction of a land-based LNG import facility, according to LNG Croatia…. / IBNA