ZAGREB, February 18, 2018 – All activities concerning the future liquefied natural gas (LNG) terminal at Omišalj on the island of Krk are going according to plan and the timeline agreed with the European Commission, which is taking part in the funding of the project, the director of the LNG Croatia company, Goran Frančić, told Hina in an interview.
Binding offers for the allocation of capacities can be expected by the end of April and a final investment decision is likely to be made by mid-2018, according to Frančić.
“In the non-binding phase of the Open Season procedure, a score of companies expressed interest in leasing the capacities of the floating LNG terminal, and 12 submitted offers for the capacities in the total amount higher than the initially offered capacity of 2.6 billion cubic metres of gas, which the capacity of the gas transport network currently allows,” Frančić said. He noted that the binding phase of the Open Season procedure was confidential and that therefore he could not “discuss details of interest.”
By the end of the first quarter of 2018, the company is expected to complete the binding phase of the Open Season procedure for the lease of capacities and conclude contracts for the construction of the landing location and gas pipeline and the procurement and management of the floating storage and regasification unit (FSRU).
Asked whether all the deadlines will be respected, Frančić says that activities concerning the technical and commercial development of the project are currently being conducted and include the procurement of the FSRU and the selection of the Engineering, Procurement, and Construction (EPC) contractor, who is responsible for all the activities from design, procurement, construction, to commissioning and handover of the project to the end-user or owner.
“We are conducting all the activities according to schedule and the deadlines defined by the European Union which participates with 28% in the financing of the procurement of FSRU, the construction of the jetty with auxiliary structures, connecting gas pipeline to a pigging station with Plinacro’s transport system. The contracts will be signed subject to a final decision on investment, which will be adopted in the second quarter of 2018,” Frančić said.
As for the assessment of the environmental impact of the floating LNG terminal, Frančić recalled that public consultation closed on 28 November 2017, and he expected a decision on the acceptability of the LNG terminal in terms of environmental impact to be made by the end of March, alongside the implementation of pertinent environmental protection measures and monitoring of the situation.
An amended location permit is likely to be issued in mid-April and the construction permit should be obtained in late May.
The entire project is likely to cost 383.6 million euro, and the EU has decided to provide 101.4 million euro of that amount. The owner is expected to finance 30% of the project and the remaining funds will be covered by borrowing. The terminal is to start releasing first gas supplies into the network in early 2020.
“LNG Croatia is the company responsible for the development of LNG import terminal project on the island of Krk. The proposed project will include the building and operating of the infrastructure necessary for receiving, storing, reloading and regasification of liquefied natural gas. The project has the purpose to secure energy needs and increase security of gas supply through the provision of new gas supply route for the Central and Southeast European countries,” according to information on the company’s website.