Croatia, Poland Plan LNG Terminal Link to Boost Security

Croatia and Poland plan to link their liquefied natural gas terminals by 2020 to boost energy security and cut dependence on Russian supplies of the fuel.

“The cooperation between our countries in connecting LNG terminals into the North-South gas pipeline corridor is crucial for the region’s energy security,” Croatian Economy Minister Ivan Vrdoljak said at a news conference in Zagreb today after meeting with Polish Treasury Minister Wlodzimierz Karpinski.

Croatia, which plans to build its terminal on the Adriatic island of Krk by 2019, estimates its total investment costs, including pipelines and compressor stations, at about 1 billion euros ($1.2 billion), Vrdoljak told Bloomberg News. Poland may spend $1.3 billion to build the corridor after opening its LNG facility in Swinoujscie next year, Karpinski’s spokeswoman Agnieszka Jablonska-Twarog said.

Croatia consumes about 3 billion cubic meters of gas a year, while its domestic production satisfies about 65 percent of its needs. Poland, which buys as much as 10.2 billion cubic meters of gas a year from Russia or two-thirds of the country’s consumption, earlier raised import capacity from the European Union as part of its strategy to diversify supplies.

Regional Player

“There is a political will to boost energy security in this part of Europe together,” Karpinski told reporters. “We share the same objectives, the same strategic goals and the next step we are working on are tactical measures.”

The Krk-based LNG is expected to have annual capacity of 4 to 6 billion cubic meters. The Polish facility’s capacity will be 5 billion cubic meters a year.

U.S. Vice President Joe Biden said last month Croatia has “potential to become a regional energy hub if it makes smart investments now, with the EU support, and works collaboratively with its neighbors.”

The chances for the Balkan country to become a regional player are now even bigger after Russia scrapped a $45 billion Black Sea pipeline to carry gas to Europe through the South Stream project, Vrdoljak said today.

“The collapse of South Stream is an opportunity for Croatia to become a regional energy center,” he said.

Balkan Links

The Krk LNG terminal may also supply gas to Bulgaria and Ukraine, Mladen Antunovic, its managing director, said in Frankfurt yesterday.

For neighboring Bosnia-Herzegovina, scrapping South Stream would make the country turn away from Russian supplies and connect to the Croat LNG terminal, according to Erdal Trhulj, energy minister in the Muslim-Croat part of Bosnia-Herzegovina.

“It’s an excellent opportunity that we must not miss,” Trhulj said in a statement on the government’s website.

While the Serbian part of Bosnia, known as Republika Srpska, may continue to rely on Russian deliveries through neighboring Serbia, the Muslim-Croat entity may build three gas links with neighboring Croatia, according to the minister.

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