American interest in Croatian LNG facilities.
US company Cheniere Energy plans to start the delivery of liquefied natural gas from American suppliers to Central and Eastern Europe, and one of the ways of delivery could be a floating LNG terminal in Croatia, according to a report in Novilist on July 29, 2015. For now, the problem is the fact that the potential market for gas is not covered by the necessary infrastructure. Still, the problem can be resolved in two to three years.
“LNG could allow the countries of Southeast Europe to participate fully in the global gas market”, a source from the company told Reuters, adding that the goal is not to push Russians from the market, but rather to provide a “good market mix”.
The construction of the LNG terminal on the Croatian island of Krk has long been considered, and the project has received the support of the United States which want to help the region diversify its energy sources and reduce dependence on Russia’s Gazprom.
Croatia started the process of attracting investors for the terminal, but many feel that the project is too expensive and that it faces a number of obstacles, which makes the floating terminal a feasible way to help supply Central and Eastern Europe.
The presence of Cheniere would also send a strong political message of US interest in the region and would represent a direct challenge to the traditional Russian dominance in the supply of energy for Southeast Europe. It is perfectly clear that the issue has not only a business but also a political dimension, and that it is a part of a broader Russian-American competition.
The Croatian government has declared that the construction of the terminal for liquefied natural gas on the island is one of the strategic investment projects, claiming that the LNG terminal is essential for economic growth and development of Croatia. The project is aligned with the strategic documents of the European Union and the Republic of Croatia.
Estimated cost of LNG terminal on the island is 600 million euros, and over a billion euros if gas pipelines and compressor stations are included. The LNG terminal has been included in the list of projects of the European strategy for energy security. The company LNG Croatia expects that the construction of the terminal will begin in mid-2016 and that it will last for three years.
Croatia annually consumes 2.7 billion cubic meters of gas, while the capacity of the LNG terminal would be between four and six billion cubic meters. Therefore, in addition to Croatia, it would serve as a gas supply route for the other countries in the region and the EU.
