US Secretary of Energy: LNG Terminal in Croatia Will Be Profitable

Total Croatia News

ZAGREB, June 5, 2019 – New gas sources in Southeast Europe, such as potential exploitation in the Romanian Black Sea, do not endanger the profitability of building an LNG terminal at Krk island, Croatia as the demand for this energy source will only grow, while its price will fall, US Secretary of Energy Rick Perry said in Ljubljana on Wednesday.

Croatia’s Večernji List daily said recently the potential exploitation of gas in the Romanian part of the Black Sea, in which the US company ExxonMobil has the lead role, would make the already modest capacities of the LNG terminal in Croatia irrelevant for the broader region.

The paper also said that Hungarian Prime Minister Viktor Orban, whose country has submitted a bid for a 25% stake in the Croatian LNG project, said upon returning from Washington that the US project in Romania had been the “first and most important topic” of his talks with President Donald Trump.

Critics of the construction of the LNG terminal in Croatia also note that the 20 or so such terminals already existing in Europe work at 25% capacity.

I think those arguments are not legitimate, said Perry, who arrived in Slovenia to attend a Three Seas Initiative summit. You will need much more gas than we will be able to deliver, he said, adding that the appetite for cleaner energy sources was increasing in Europe.

If Europe wants an economic transition, it will need more energy, Perry said, adding that Germany planned to abandon nuclear energy.

Either the lights will go out or they will use LNG. There is no third option, he said about Germany, adding that the US supported the construction of the Krk terminal. Not necessarily for the purchase of US gas, he said, but because more routes and suppliers are a good formula for Europe which cannot be free and sovereign if it depends only on Russian gas.

Russia currently sells gas at a lower price, but Perry said the price of US gas was constantly falling, that this would continue and that US natural gas reserves were massive.

He also said climate change could not be fought without nuclear energy free of harmful emissions. He announced a forum for next month between the European Commission and his department on Small modular reactors.

A panel discussion on energy on Wednesday afternoon marked the start of a business forum in Ljubljana, which is being held parallel to a summit of leaders of countries participating in the Three Seas Initiative, the largest international event held in Slovenia over the past decade with more than 600 participants from some 40 countries, including Croatia’s President Kolinda Grabar-Kitarović.

Opening the business forum, Slovenia’s Prime Minister Marjan Šarec said that only better connectivity in Europe, not just north-south but east-west as well, can secure a better and more successful future for new generations. Investment and cohesion funds that would be used for better digital and energy connectivity of Central and East Europe would also benefit the Western part of the continent.

Croatia’s delegation in the energy panel included Environment and Energy Minister Tomislav Ćorić and an executive at the national electricity provider HEP, Robert Krklec.

Ćorić said that within the framework of the Three Seas Initiative, Croatia is focused on diversifying sources and routes of energy procurement. He also spoke about plans for the construction of an LNG terminal on the island of Krk, which should be operational in 2021.

US Secretary of Energy Rick Perry, who had met with Slovenia’s President Borut Pahor and Prime Minister Šarec earlier in the day, attended the energy panel too.

There seemed to be some divergence of opinion between Perry, who said he was speaking on behalf of US President Donald Trump, and Miguel Berger from the German Economy Ministry concerning the Russian-German South Stream II gas pipeline and the EU’s independence from Russia for energy supply.

Berger said that Germany supports the construction of an LNG terminal on Krk island, Croatia and that gas be imported from the USA as a means of diversifying supply routes, but that that has to be based on market principles. He also dismissed US claims that South Stream II jeopardises Europe’s energy independence.

More LNG terminal news can be found in the Business section.



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