Croatia hopes to sign LNG terminal memorandum soon

ZAGREB (Reuters) – Croatia hopes to sign a memorandum of understanding for a liquefied natural gas (LNG) terminal on the Adriatic in two to three weeks, a senior Economy Ministry official said on Monday. Zagreb is preparing to build the LNG terminal, planned to receive the first tankers in 2012, with a consortium comprising three local and five European firms. «We hope we’ll fine tune the details of the agreement and make it ready for signing in the next two to three weeks,» Assistant Economy Minister, in charge of energy policies, Zeljko Tomsic, told Reuters. Discontent among international partners, who disputed Croatia’s ambition to have veto powers with a 25 percent ownership of the project, had earlier threatened to delay or even sink the project. The originally agreed to voting mechanism envisaged a 61 percent majority decisions, so the 25 percent veto right would effectively violate that mechanism. Tomsic said only «minor details» were now left to be agreed upon among the partners. The Croatian shareholders in the consortium are state oil concern INA, which is 25 percent owned by Hungary’s MOL, state-owned power board HEP and state gas company Plinacro. Foreign partners are Austria’s OMV, French oil company Total, German utility RWE’s subsidiary Transgas, Slovenia’s gas company Geoplin and another German energy giant, E.ON-Ruhrgas. Tomsic said the government’s consultants should by mid-June prepare a proposal for the best location of the terminal and the most suitable alternative. Experts say the best place would be on the northern Adriatic island of Krk, but environmentalists voiced opposition, saying it could harm the island’s pristine landscape and damage tourism. Croatia’s LNG terminal is planned with a capacity of around 10 billion cubic meters (bcm) of gas per year. For comparison, Austria consumes between 8 and 8.5 bcm annually.