• Natural Gas News

    Croatian LNG Terminal Takes First Cargo

Summary

The terminal drives a wedge between Russia and its customers in the Balkans.

by: William Powell

Posted in:

Complimentary, Natural Gas & LNG News, Europe, Liquefied Natural Gas (LNG), Top Stories, Premium, Corporate, Political, News By Country, Croatia, Hungary

Croatian LNG Terminal Takes First Cargo

The first commercial cargo of LNG was unloaded into Croatia’s Krk LNG regasification terminal January 1, for the local subsidiary of Hungarian Gas Trade (MFGK), the company said January 4. The commissioning cargo was the pipeline equivalent of 91mn m3. Heavily reliant on Russian imports, Hungary and Croatia see this new natural gas supply route as of strategic significance, as well as the start of MFGK’s involvement in the Krk LNG terminal, MFGK said.

The cargo is the first element of the package of agreements signed on June 5, 2020 by MFGK which includes a total of 6.75bn m3 regasification capacity booking at Krk LNG Terminal and related LNG supply contracts for the period of nearly seven years starting on January 1, 2021. In the summer, Qatari Powerglobe said it had booked the terminal's capacity from January 1 but there was no statement on its website about the ultimate source of the LNG.

The terminal gives the two countries direct access to natural gas sources and market players previously unavailable in the Hungarian and regional markets. LNG procured by MFGK at the Krk Terminal is exclusively sourced from western European market players, it said. MFGK itself is part of Hungarian state MVM.

Active in "nearly all components of the electricity and natural gas value chains, from power generation to customer services and from electricity transmission to natural gas storage, MVM Group is the main guarantor of Hungary’s energy security." MFGK said.

MFGK is also eyeing expansion into Austria, the Czech and Slovak republics, Serbia and Romania. Serbia is however accessing Russian pipeline gas: the two countries have strong political ties and in June, Hungarian grid operator FGSZ signed an agreement for a 6bn m³/yr link to Serbia's gas grid, as the Russian-financed TurkStream brings Russian gas north from western Turkey and Bulgaria.

Hungarian involvement in Krk LNG is considered a priority by the government, which is also explicitly reflected in the new National Energy Strategy. The EU supported the implementation of the terminal with €101.4 ($125)mn from the Connecting Europe Facility (CEF).