ECONOMY

Croatia soon set to move on a liquefied natural gas terminal

ZAGREB (Reuters) – Croatia should soon define a location for its Adriatic liquefied natural gas (LNG) terminal and sign an agreement with foreign partners to kick off its building, a top Croatian energy official said yesterday. «The government should reach a decision on location in a month or so and then an agreement with foreign partners should follow quickly,» Assistant Economy Minister in charge of energy policy, Zeljko Tomsic, told Reuters in an interview. Analysts believe the best location for the terminal is the northern Adriatic island of Krk. The project was to get under way last year and be completed by 2012, but was delayed due to disagreements over voting rights between Croat and foreign investors and uncertainty about the location. Tomsic said Croatia could not accept that three foreign partners who will have 61 percent in the Adria LNG consortium – Germany’s E.ON Ruhrgas, Austria’s OMV and France’s Total – should have a possibility to outvote other partners. «We suggested a veto right for the Croatian partners, which was not accepted, or that decisions be taken by a 76-percent majority. But I believe we’re now close to a mutually acceptable shareholders’ agreement,» Tomsic said. Other foreign partners in the consortium are Germany’s RWE and Slovenia’s gas company Geoplin. Croatian companies comprise 25 percent of the consortium and include oil concern INA, in which the state has 44 percent and Hungary’s MOL 25 percent, state power board HEP and gas company Plinacro. The project, estimated at $1 billion and with a capacity of up to 15 billion cubic meters of gas per year, is part of European gas companies’ efforts to diversify import resources and reduce dependence on Russian pipeline gas. Croatia will take some 2 billion cubic meters a year. «I believe the 2012 target date is still reachable, but the (Croatian) state has to intensify its efforts,» Tomsic said. PEOP lagging behind Another important project for Croatia, which seeks to become a regional energy transport hub, is Paneuropean Oil Pipeline (PEOP), to transport Caspian crude from the Romanian port of Contanta to Italy’s Trieste, but Tomsic was less optimistic about its speed. «We have had a delay as Slovenia is reluctant to participate due to environmental concerns, while in northern Italy the pipeline network is fragmented, which makes it more complex to push forward the talks,» Tomsic said. He said the next meeting about the project is scheduled for later this week in Brussels as the European Commission is very keen to see the pipeline come to life. «If Slovenia remains reluctant, an option is to circumvent it by an undersea connection from Croatia to Italy. I hope we’ll have a clearer picture soon,» Tomsic said. The PEOP, also tentatively scheduled to be completed by 2012, should have annual capacity of 60-90 million tons (1.2-1.8 million barrels per day) and the investment is worth roughly $3.5 billion.