LNG terminal – a platform for bringing Russia and the West closer together or further apart?
The new Croatian government has opted for the floating LNG terminal on the island of Krk which should strengthen energy independence of the country and the Eastern and Central Europe. The United States have expressed its strong support for the project and say the project is not aimed against Russia, Europe’s biggest natural gas supplier. The terminal has been an EU priority since the last year. The Union is attempting to diversify its supply routes and lessen its gas dependence on Russia because of its strained relationship with the Russian government, reports poslovni.hr on March 4, 2016.
Tihomir Orešković’s government wants to put words into action and proceed with the project. It believes that the previous government hesitated with decisions necessary to start the construction of the LNG facility. Orešković and the members of his cabinet have recently met in Zagreb with Amos Hochstein, a special envoy and coordinator for international energy affairs at the US State Department. Hochstein pointed out that the Krk facility was in the interest of both Croatia and the US.
After the talks, the government said that one of the priorities is a floating terminal, which is cheaper than the fixed one and can be constructed faster. It could become fully operational within two years. “This is a huge commercial and geopolitical opportunity for Croatia. Above all, this is an opportunity for Croatia to help diversify an important region in Europe against which energy resources are being used as political tools”, Hochstein said in a statement to Hina News Agency.
The US stands ready to supply LNG facility with gas. The gas could also come from Australia and Qatar, and from other countries that have been developing their gas resources. “But, gas can be purchased only if you have the infrastructure to receive it”, Hochstein said. It was too early, he added, to say anything about the terminal’s capacity and about whether Croatia will rent or buy the facility, but it is clear that the floating platform is a better option than the fixed one. “It could be rented, bought or, if it turns out to be a bad solution, it could simply be removed”, he explained.
As for the platform’s capacity, the Croatian government and Croatian companies should discuss this issue with both domestic and international buyers. “The capacity should be determined based on these talks and agreements”, Hochstein added. With the new LNG terminal and connection with Hungary, the gas would be transported from the Croatian coast all the way to Ukraine, and possibly to Slovenia and Austria, he said. “I see Croatia as the regional leader which has this opportunity to become an important part of the solution to the energy crisis in the region”.
He asserted that this project was not aimed against Russia and that Russian companies should continue to sell gas while “playing by the rules, and not continuously try to breach them”. “What I am talking about here is not set against Russia. On the contrary, Russia should have the opportunity to remain a large supplier, but why wouldn’t other countries have more options that will allow them some flexibility”, said the high-level US official.
After his talks in Zagreb, Hochstein felt encouraged with the government’s commitment to the project. “There is a true interest to proceed with this project,” He announced that Washington will encourage Brussels to put LNG at the top of its list of funding priorities because it was not “important only for Croatia, but for a wider European area”.