The European Commission has approved plans for a new floating LNG import terminal on Krk island in Croatia in a move to enhance energy security
Using a floating storage and regasification unit (FSRU) and connections to the national gas transmission network, the LNG import terminal will transport up to 2.6Bn m3 per year of natural gas into Croatia starting in 2021.
Terminal operator LNG Croatia is owned by Croatian state-owned electricity and gas utility Hrvatska Elektroprivreda, which has an 85% stake, and Croatia national gas transmission system operator Plinacro, which controls the remaining 15% interest.
Golar won a bid in November 2018 to convert 2005-built LNG carrier Golar Viking to an FSRU vessel at a cost of €159.6M (US$177M). The FSRU will be delivered by Chinese shipbuilder Hudong-Zhonghua in October 2020 to Krk island.
The terminal’s construction is expected to cost €233.6M (US$259M), with financing of €32.2M (US$36M) from LNG Croatia’s shareholders, €101.4M (US$113M) from EC’s Connecting Europe Facility and €100M (US$111M) from the Croatian Government. Additionally, Croatia will grant a tariff compensation called ‘security of supply fee’, which is financed by fees charged by the gas transmission system operator to gas users along with gas transmission tariffs, in case revenues from the terminal fees are not sufficient to cover operating expenses.
On the list of ‘European Projects of Common Interest’ since 2013, the terminal will help lessen Europe’s dependence on natural gas from Russia.
The LNG terminal will deliver gas to the Croatian national transmission network, connected with Slovenia, Italy and Hungary, and with other EU countries via non-EU member states such as Serbia and Montenegro.