Croatia Joins Greece, Italy to Push for Europe-Caspian Gas Link

Croatia has joined Greece, Albania, and Italy in pushing for the Trans-Adriatic pipeline, which would bring natural gas to Europe from the Caspian region through Turkey.

Representatives from the four nations as well as Montenegro and Bosnia-Herzegovina will meet in Dubrovnik, Croatia, tomorrow to give “strong and clear political support for the pipeline and underline its commercial advantages,” Croatian Deputy Foreign Minister Josko Klisovic said.

The project, known as TAP, is competing with the Nabucco pipeline plan supported by Bulgaria, Romania and Hungary, to ship Azeri natural gas to Europe. Shah Deniz, a gas deposit group led by BP Plc (BP/), is expected by July to choose between the two projects to transport 10 billion cubic meters of gas annually to the European Union. The group’s partners also include Statoil ASA (STL), Total SA (FP) and State Oil Company of Azerbaijan, or Socar.

“Our message to Shah Deniz is that TAP is less costly as it’s shorter, and that all the governments involved support it,” Klisovic said in an interview in his office in Zagreb today. “This includes Italy, which is one of the biggest gas consumers in Europe.”

EU nations want to curb their reliance on gas deliveries from Russia through Ukraine after disruption in recent years over price disputes. TAP’s 800-kilometer (500-mile) route would go through Turkey through Greece, and Albania to Italy, while the 1,300-kilometer Nabucco would traverse Bulgaria, Romania and Hungary.

Gas Consumption

Gas consumption in the former Yugoslav region and Albania will double by 2020 to 11 billion cubic meters of gas a year, according to an October 2011 study by state-owned pipeline operator Plinacro d.o.o.

Croatia, which needs about 1 billion cubic meters of gas a year, wants to meet the increased demand by diversifying its supplies.

From the Albanian town of Fier, an interconnector would lead toward Montenegro and further on to Croatia, joining the existing pipeline at Split and ending at the island of Krk in the northern Adriatic, where Croatia plans to build a liquefied natural-gas terminal, Klisovic said. An off-shoot pipeline to Hungary is also planned, he said.

“Croatia supports the TAP project as it gives us the possibility to diversify our gas supply,” Klisovic said. Diversification plans “probably” include a connector to the South Stream gas pipeline project, whose main stakeholder is Russia’s Gazprom OAO (GAZP), as well as the building of an LNG terminal on Krk, he said.

Terminal Studies

Pre-feasibility and environment studies for the terminal, estimated at 700 million euros ($929 million) are completed, and the government will proceed with seeking strategic partners in the fall, Klisovic said.

The OMV AG-led Nabucco pipeline project said it can offer bigger markets and greater potential for exports should it win the right to ship natural gas from Azerbaijan’s Shah Deniz field to Europe over a rival proposal, Christian Dolezal, communications chief of Nabucco Gas Pipeline International GmbH, said in March.

Azerbaijan said in February it favors TAP. Nabucco offered in January a 50 percent equity option in the pipeline to the Shah Deniz group.

To contact the reporter on this story: Jasmina Kuzmanovic at jkuzmanovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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