Croatia's €233m LNG terminal given EU green light

European Union antitrust regulators have approved Croatia's planned construction and operation of a liquefied natural gas (LNG) terminal on Krk Island, saying that the project would help diversify reliance from Russian imports and contribute to energy security.

“The new LNG terminal in Croatia will increase the security of energy supply and enhance competition,” said Europe’s Competition Commissioner Margrethe Vestager in a statement.

“We have approved the support measures to be granted by Croatia because they are limited to what is necessary to make the project happen and in line with our state aid rules.”

Croatia decided in January to co-finance the terminal at the town of Omisalj with €100-million euros ($112.95 million). The EU is also providing €101.4-million euros and the remaining money will come from shareholders of the project development company, LNG Croatia.

"In addition, Croatia will grant a tariff compensation called ‘security of supply fee', which is financed by levies 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," the Commission said.

The project will comprise a floating LNG terminal with storage and regasification unit as well as the connections to the national gas transmission network. The terminal will have a total capacity of 2.6 billion m³ of natural gas per year from 2021.

The Krk LNG terminal will deliver gas to the Croatian national transmission network, connected with EU member states Slovenia, Italy and Hungary, as well as with Serbia and Montenegro.

The terminal has been put on the lists of European Projects of Common Interest since 2013, given its strategic importance for the diversification of natural gas supplies into Central and Southeast Europe.

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