LNG Croatia Shrinks Faltering Project
LNG Croatia has scaled back its planned floating import project on Krk island. On May 8, it said it had cancelled its previous procurement process for a floating storage and regasification unit (FSRU) and set a new deadline for submission of bids by June 8, 2pm Central Europe time.
“It was necessary to revise the technical characteristics and capacities of the initially requested FSRU to reduce the initially planned capital costs of the project and enable the realisation of the project with a lower capacity booking,” said LNG Croatia on May 8.
Its May 8 statement hinted at the disappointing result of its Open Season process last month, when only Croatia’s INA - part-owned by Hungary’s Mol - was reported to have expressed interest in LNG import capacity at Krk. Last month state-run LNG Croatia postponed the deadline for final bids in its Open Season until June 22 – it’s assumed that deadline still stands, unless cancelled.
LNG Croatia's business strategy has been undermined by high transmission tariffs imposed by Croatian state gas grid Plinacro on gas flows into neighbouring Hungary, by the Hungarian government losing patience in the Krk project's slow progress and its support instead for more Russian gas imports via TurkStream, and by Gazprom's more proactive and competitive gas marketing in the region.
The original plan foresaw an FSRU with 2.6bn m3/yr of regas capacity, and an estimated project cost of around €360mn ($440mn), of which EU grants were to make up just under one-third. That’s in doubt now, as LNG Croatia gave no details of how large an FSRU it now wants.
When a Krk import terminal was first proposed by the OMV-led Adria LNG consortium two decades ago, the costly onshore scheme was to have had 10bn m3/yr capacity, but never progressed.