ZAGREB, December 21, 2018 – The LNG Croatia company has received binding offers for the lease of 520 million cubic metres of gas from the future LNG terminal on Krk and two conditional offers for the non-binding lease of 300 million cubic metres, the company said on Friday.
The deadline for submission of bids in the second round of the Open Season procedure for booking the terminal regasification capacities was 20 December 2018, after two earlier extensions of the deadline.
“LNG Croatia received bids for binding capacities booking of the LNG terminal on Krk in the amount of 0.52 billion cubic meters. In addition to the offers for binding capacities booking, conditional bids for non-binding capacity booking in the amount of 0.3 billion cubic meters were received,” the company said on its website.
This is considerably less than an estimated 1.5 billion cubic metres required to make the investment in the construction of the terminal profitable.
The company said that an analysis of the economic test based on the bids received would follow.
According to unofficial media reports, two Croatian companies made binding offers for capacity booking – the INA oil company for about 100 million cubic metres and the HEP power company for about 400 million cubic metres. The Hungarian MVM electricity group apparently did not make a bid.
Reporting on a meeting between Croatian Environment and Energy Minister Tomislav Ćorić and Hungarian Foreign Trade and Foreign Affairs Minister Peter Szijjarto in Budapest in early October, MTI news agency said that Hungary could annually import 1.7 billion cubic metres of gas from the Krk LNG terminal, adding that the two countries would approach the European Commission to set prices of gas delivery to Hungary from the Croatian LNG terminal.
The capacity of the floating LNG terminal on Krk was planned at 2.6 billion cubic metres annually, which would require booking of at least 1.5 billion cubic metres to make the investment profitable.
Speaking to reporters last month, Minister Ćorić mentioned a possibility of the government co-funding the LNG terminal in case of capacity underbooking. “I believe that the Krk LNG terminal is a great strategic interest and that, if necessary, Croatia should consider co-financing the terminal,” he said then.
The Krk LNG terminal is planned as part of efforts by the European Union to secure gas imports from multiple sources rather than mainly from Russia. The targeted markets are central and southeastern European countries.
The total cost of construction of the LNG terminal with a gas pipeline is estimated at 265 million euro, with the EU to invest 101.4 million euro in the project. The terminal is scheduled to start operating in early 2021.
More news on the never-ending story about future LNG terminal can be found in our Business section.
