ZAGREB, May 4, 2020 - The MET Croatia Energy Trade company has submitted a binding offer to the LNG Hrvatska company to book capacities in the LNG terminal on the northern Adriatic island of Krk for a three-year period, amounting to 1.3 billion cubic meters overall, MET Croatia announced on Monday.

"Significant changes on the international energy markets are spearheaded by the rapid growth of global LNG trade, a development that MET Group welcomes. The Croatian LNG project will help Central and Eastern Europe to become an integral part of this global market. Furthermore, Croatian LNG imports will help MET Group link most of its downstream markets both from pipeline gas and from an LNG perspective as well," the company said in a press release.

Mario Matković, CEO of MET Croatia Energy Trade, said that that company was actively monitoring the global growth of demand for liquefied natural gas and increasing the volume of LNG delivered day by day.

"To succeed on the LNG market, apart from the specific knowledge with a global LNG desk, it is necessary to have a local presence, i.e. a market access for gas placement. We are the only player in the region that has both. Therefore, we have no doubt that booking the capacity in the LNG terminal in Krk will highly contribute to our long-term business strategy," Matković said.

MET Croatia, a member of MET Group, a European energy company headquartered in Zug, Switzerland, has been present in Croatia since 2013. The group employs 1,700 people in 15 countries, operates in 26 gas markets and is active in 22 international trading hubs. MET Group has been operating for 13 years and is the leading independent integrated energy company in the CEE region and other European markets including Spain and Italy, the statement said.

According to information available on the website of the LNG Hrvatska company, construction work on the floating LNG terminal is proceeding according to plan, and the terminal is due to start operating in early 2021. The terminal's technical capacity is 2.6 billion cubic metres annually.

The value of the investment project is estimated at €233.6 million. The European Commission has granted €101.4 million given that the project is listed among the Commission's projects of common interest.

More news about the LNG terminal can be found in the Business section.

ZAGREB, March 5, 2020 - Hungarian Minister of Foreign Affairs and Trade Peter Szijjarto said on Thursday that Hungary wanted to participate in the LNG terminal project on the northern Adriatic island of Krk, expressing hope that Croatian Environment and Energy Minister Tomislav Ćorić would soon convene a working group on Croatia's part.

Asked by reporters if there had been any progress with regard to Hungary's participation in the LNG terminal project, Szijjarto said that Hungary considered its energy cooperation with Croatia as "a game changer in the region." He said that there had been a lot of talk about diversification of energy supply routes but that nothing had really happened in that regard in the entire region.

Hungary sees the LNG terminal on Krk island as a huge opportunity for Hungary, for Croatia and for the entire region, Szijjarto said after signing a statement of intent with Croatian Minister of the Sea, Transport and Infrastructure Oleg Butković to boost economic cooperation and transport ties between the two countries' border areas.

He said that Hungary had put forward a three-point proposal to Croatia.

First, to connect and combine the gas delivery networks of the two countries, which would eliminate the border crossing fees and make gas supply cheaper for both countries.

Second, to start together negotiations with external partners on gas deliveries to the terminal, primarily with Egypt, Qatar, Australia and the United States.

And third, Hungary is ready to buy a stake in the LNG terminal and Croatia should say what would be an acceptable size, because the terminal is Croatian.

"This is a comprehensive proposal from our side, for which we have a working group. I hope that Minister Ćorić will be ready to convene a working group on the Croatian side as well, as soon as possible," Szijjarto said.

Emphasising the importance of this project, he said that it has "a game-changing significance from our perspective because currently, when it comes to diversification of sources, this is the only viable solution for the upcoming years."

The value of the floating LNG terminal is estimated at €234 million. The European Commission has granted €101.4 million for the construction of the LNG terminal given that the project is included on the European Commission's list of projects of common interest.

Hungary made an offer to buy a 25% stake in the LNG terminal in 2018.

The Croatian government decided in early 2018 to allocate €100 million for the project, notably €50 million in 2019 and €50 million in 2020. The remaining €32.6 million would be provided by the founders of the LNG Croatia company - the electricity provider HEP and the natural gas supplier Plinacro.

More energy news can be found in the Business section.

ZAGREB, March 3, 2020 - The construction of a gas pipeline for the LNG terminal along the Omišalj-Zlobin route is going according to plan and the completion of that HRK 430 million investment is planned for the end of this year, the Plinacro natural gas transmission company reported on Tuesday.

The construction works, which began in mid-December, are being conducted along the entire gas pipeline route from the future Zlobin hub to the future intersection in Omišalj, Plinacro said in a press release.

Preparations have been conducted along the entire route with 60% of the required trenches already dug out and some sections of the pipeline already put in place in the trenches. Welding has also commenced and work at the intersection sites are underway.

Intensive activities are being conducted on Krk island so that that part of the construction can be completed before the tourism season.

The works should be completed and be ready once the LNG terminal becomes operational to start shipping gas from the terminal along the pipeline.

After the completion of the construction of the first compressor station on Croatia's gas transmission system in Velika Ludina, this is the second largest project of Plinacro's third investment cycle launched in 2018.

The project was supported by the European Commission and received a grant of a little more than €16 million for the costs of construction.

More energy news can be found in the Business section.

ZAGREB, June 19, 2019 - Croatian Energy and Environment Protection Minister Tomislav Ćorić and Hungarian Foreign Minister Peter Szijjarto on Wednesday agreed on setting up a working group tasked with analysing the potential cooperation on the gas markets of the two neighbouring countries.

After their talks in Zagreb on Wednesday morning, Ćorić said that they had discussed the possibilities of developing cooperation between the Croatian and Hungarian gas markets.

We have agreed on establishing a working group consisting of Croatian and Hungarian experts and in the coming months it will analyse potential pros and cons of such form of cooperation, Ćorić said.

The Hungarian minister confirmed that operators of the gas transport systems and national regulators would be included in this task.

This will be the closest cooperation between the Croatian and Hungarian gas markets so far, he added.

I would like underscore that we treat the diversification as a crucial issue. An LNG terminal is a realistic scenario and we believe that partnership can help us to be partners in this project and make it innovative from the view of the energy security of the region of Central Europe. Therefore we have agreed to continue our talks, Szijjarto said.

As for the gas supply diversification, he recalled that Hungary had already expressed readiness to negotiate a possibility for Budapest to have a 25-percent interest in the future company that would run and own the LNG terminal off the Croatian terminal of Krk.

Such cooperation could create a market situation whereby the purchase of the LNG gas at that terminal could be economically visible and competitive for us, the Hungarian minister said.

Ćorić said that he found this form of cooperation a positive step forward.

Such cooperation is expected to result in combination of stakes held by owners and the lease of capacities in the terminal. However, he admitted that there are differences in which steps to be taken in that regard.

More energy news can be found in the Business section.

ZAGREB, June 5, 2019 - New gas sources in Southeast Europe, such as potential exploitation in the Romanian Black Sea, do not endanger the profitability of building an LNG terminal at Krk island, Croatia as the demand for this energy source will only grow, while its price will fall, US Secretary of Energy Rick Perry said in Ljubljana on Wednesday.

Croatia's Večernji List daily said recently the potential exploitation of gas in the Romanian part of the Black Sea, in which the US company ExxonMobil has the lead role, would make the already modest capacities of the LNG terminal in Croatia irrelevant for the broader region.

The paper also said that Hungarian Prime Minister Viktor Orban, whose country has submitted a bid for a 25% stake in the Croatian LNG project, said upon returning from Washington that the US project in Romania had been the "first and most important topic" of his talks with President Donald Trump.

Critics of the construction of the LNG terminal in Croatia also note that the 20 or so such terminals already existing in Europe work at 25% capacity.

I think those arguments are not legitimate, said Perry, who arrived in Slovenia to attend a Three Seas Initiative summit. You will need much more gas than we will be able to deliver, he said, adding that the appetite for cleaner energy sources was increasing in Europe.

If Europe wants an economic transition, it will need more energy, Perry said, adding that Germany planned to abandon nuclear energy.

Either the lights will go out or they will use LNG. There is no third option, he said about Germany, adding that the US supported the construction of the Krk terminal. Not necessarily for the purchase of US gas, he said, but because more routes and suppliers are a good formula for Europe which cannot be free and sovereign if it depends only on Russian gas.

Russia currently sells gas at a lower price, but Perry said the price of US gas was constantly falling, that this would continue and that US natural gas reserves were massive.

He also said climate change could not be fought without nuclear energy free of harmful emissions. He announced a forum for next month between the European Commission and his department on Small modular reactors.

A panel discussion on energy on Wednesday afternoon marked the start of a business forum in Ljubljana, which is being held parallel to a summit of leaders of countries participating in the Three Seas Initiative, the largest international event held in Slovenia over the past decade with more than 600 participants from some 40 countries, including Croatia's President Kolinda Grabar-Kitarović.

Opening the business forum, Slovenia's Prime Minister Marjan Šarec said that only better connectivity in Europe, not just north-south but east-west as well, can secure a better and more successful future for new generations. Investment and cohesion funds that would be used for better digital and energy connectivity of Central and East Europe would also benefit the Western part of the continent.

Croatia's delegation in the energy panel included Environment and Energy Minister Tomislav Ćorić and an executive at the national electricity provider HEP, Robert Krklec.

Ćorić said that within the framework of the Three Seas Initiative, Croatia is focused on diversifying sources and routes of energy procurement. He also spoke about plans for the construction of an LNG terminal on the island of Krk, which should be operational in 2021.

US Secretary of Energy Rick Perry, who had met with Slovenia's President Borut Pahor and Prime Minister Šarec earlier in the day, attended the energy panel too.

There seemed to be some divergence of opinion between Perry, who said he was speaking on behalf of US President Donald Trump, and Miguel Berger from the German Economy Ministry concerning the Russian-German South Stream II gas pipeline and the EU's independence from Russia for energy supply.

Berger said that Germany supports the construction of an LNG terminal on Krk island, Croatia and that gas be imported from the USA as a means of diversifying supply routes, but that that has to be based on market principles. He also dismissed US claims that South Stream II jeopardises Europe's energy independence.

More LNG terminal news can be found in the Business section.

ZAGREB, April 27, 2019 - Zorislav Antun Petrović, leader of the nonparliamentary ORaH party, said on Saturday that nine members of the European Parliament from the Green group had asked of European Commission Vice-President Maros Šefčovič, in charge of Energy Union, that the EC immediately stop supporting the project to build an LNG terminal off the northern Croatian Adriatic island of Krk.

Petrović said that energy independence was in Croatia's interest and that it was achieved by investing in renewables rather than spending money to enable the import of foreign energy products in Croatia.

He said that energy transition was one of the key topics for the Green Left coalition (consisting of ORaH, the We Can! platform and the New Left party), which is running in the coming elections for the European Parliament.

Petrović said that in their letter to Šefčović, the nine Green members of the European Parliament said that not only was the LNG project in direct contravention of the EU's obligations assumed under the Paris Agreement but that they had noticed numerous irregularities in its implementation that so far had not affected the EC's support for the project.

Petrović said the Green MEPs cited in their letter a number of reasons why the project was unacceptable in its present form.

They asked the EC not to approve the assistance requested by the Croatian government for the project and not to renew the Projects of Common Interest (PCI) status for the LNG terminal on the fourth PCI list that is currently being worked on.

Petrović said the letter was signed by MEPs Thomas Waitz, Monika Vana (Austria), Max Andersson (Sweden), Reinhard Buetikofer, Sven Giegold (Germany), Philippe Lamberts (Belgium), Florent Marcellesi, Michele Rivasi (France) and Tilly Metz (Luxembourg).

More news about the LNG project can be found in the Business section.

ZAGREB, April 13, 2019 - The Hungarian government has made an offer to buy 25 percent of a LNG terminal that is to be built in Croatia, Hungarian Foreign Minister Peter Szijjarto told journalists in Dubrovnik on Friday, according to MTI news agency.

Szijjarto had talks with Croatia's Environment and Energy Minister Tomislav Ćorić on the sidelines of a China-Central and Eastern Europe summit and said it was crucial for Central Europe to diversify its gas supplies.

Szijjarto said it was in Hungary's strategic interest that the terminal should be built and that it should offer gas to Hungary at a competitive price. He added that the decision and the plans for the terminal have been in place, but "there has been no progress" in the physical implementation.

The Hungarian foreign minister said that Croatia had "not yet provided a clear answer" on the matter, as the country wants to take a decision on Hungary's offer at the same time as it contracts gas volume. Investing in the terminal is "a strategic issue" but "we will certainly not buy gas at a higher price than at present," he said, adding that the negotiations would continue.

Ćorić confirmed on Monday that he had received a letter of intent from Hungary to purchase a 25 percent stake in the future LNG terminal, adding that the interest in entering the ownership structure should be accompanied by an interest in the lease of gas from the LNG facility on the northern Adriatic island of Krk.

"A few weeks ago, Hungarian Foreign Minister Peter Szijjarto sent a letter of intent on behalf of the Hungarian government. Hungary is interested in buying 25% plus one share in the LNG terminal," Ćorić said then in response to questions from the press.

He said that talks with Hungary would continue at the summit of 16 Central and Eastern European countries and China in Dubrovnik. He noted that Hungary's demand for gas was considerably higher than Croatia's, given that Hungary's annual natural gas consumption ranges between nine and ten billion cubic metres, compared with Croatia's consumption of 2.7 billion cubic metres.

The value of the floating LNG terminal on Krk island is estimated at 234 million euro. The European Commission has approved a 101.4 million euro grant for the project, which is included on the Commission's list of projects of common interest.

The Croatian government has decided to set aside 100 million euro for the project, 50 million in 2019 and as much in 2020. The remaining 32.6 million euro will be provided by the founders of the LNG Croatia company - the HEP national electricity provider and the Plinacro gas network operator.

Ćorić reiterated that the construction of the LNG terminal was a strategic project for Croatia.

More news about the LNG terminal on Krk can be found in the Business section.

ZAGREB, April 8, 2019 - The Sustainable Development of Croatia (ORaH) party and the European Green Party (EGP) said on Monday they would insist on full transparency of the financing and construction of an LNG terminal on Krk island so that it does not jeopardise Croatian citizens' standard of living as well as the health and livelihood of the people of the Kvarner coastal region, notably the people of Krk.

The two parties held a press conference after Thomas Waitz, a member of the European Parliament and of the EGP executive committee, visited the northern Adriatic island to establish the facts concerning the construction of an LNG terminal in Omišalj.

He said that because private investors had pulled out of the project, the 107 million euro from European cohesion and development funds which should have covered 27% of the investment now covered 45%.

All private investors have withdrawn from the project, so it's legitimate to ask if the project is cost-effective at all, Weitz added.

It is unusual that the environmental impact study used for the project was made for the land and not the floating terminal and that the permits issued for the land terminal were simply expanded to the floating one, although they are essentially different projects, he said.

He said no EU funds had been granted yet and that he would ask the European Commission to review the allocation and warn it that the project was different than the one agreed for financing.

ORaH president Zorislav Antun Petrović said his party would follow the developments in cooperation with the EGP.

More news on the LNG terminal can be found in the Business section.

ZAGREB, April 4, 2019 - Omišalj Mayor Mirela Ahmetović on Wednesday commented on the latest ruling by the Administrative Court rejecting the municipality's lawsuit questioning the changes made to the development permit for a floating LNG terminal on Krk, saying that the municipality would appeal and that it and its residents would turn to European judicial bodies and institutions.

Ahmetović told a press conference that the court had rejected the municipality's lawsuit against the Ministry of Construction and Physical Planning questioning the legality of the development permit issued for the floating LNG terminal.

Ahmetović said that the municipality would appeal the court's decision and added that considering the developments to date concerning the terminal, she did not expect the court would have decided differently.

"We have initiated communication with the European Commission and European Parliament and are preparing to take the matter to European judicial institutions," she said and added that the government had not once turned to the local community and the prime minister and president "have not set foot in Omišalj municipality where the so-called strategic project is to be implemented."

Ahmetović claimed that the state wants to "install something (in Omišalj) that wasn't considered even in the craziest scenario" by the municipality or county. She added that it never happened that the EU financed a project that an entire local community objected to, as is the case with the local community on Krk island.

Ahemtović said that county and municipal physical plans exist. There is also a development strategy that mentions an LNG terminal, and the development strategy refers to an onshore terminal and not offshore.

County Prefect Zlatko Komadina said that the local community was not opposed to an LNG terminal but wanted it to be built on shore.

"It is absurd that instead of an onshore terminal, as provided for under the physical plan, we are facing aggression with a floating terminal that no one here wants," Komadina concluded, appealing to state authorities to work on the project in agreement with the regional and local community.

More news about the LNG terminal can be found in the Business section.

ZAGREB, March 13, 2019 - When asked by the press on Tuesday about Monday's meetings in Budapest with individuals from the energy sector about which he had tweeted, U.S. Ambassador to Croatia Robert Kohorst confirmed that most of the talks focused on the LNG terminal.

"Interesting day of meetings in Budapest organized by the US Embassy, including conversations with a number of Hungarians with interests in the energy business. Also, nice to spend time with Marie Royce, ECA Assistant Secretary, and David Cornstein, US Ambassador to Hungary," Kohorst tweeted on Monday.

The U.S. Ambassador said today in Zagreb he was very proud of the Croatian government for having the courage to adopt a decision about investing in the project, stressing that over the next ten years it will be clear to everyone that this is a very important decision regarding energy security for Croatia and the region.

Asked if Hungary was interested in investing, Kohorst answered in the positive, adding that this also depended on conditions, but that very constructive talks were underway.

Kohorst said that the LNG terminal would be a very valuable asset to Croatia, not only as an insurance instrument for energy diversification and security but also when it comes to getting favourable prices when buying energy.

In other related news, participants in a working lunch which was organised in Zagreb on Tuesday by the American Chamber of Commerce (AmCham) called on Croatia to actively seek investments directed to concrete industries and companies.

Addressing this Executive Lunch focused on "Comparative advantages of Croatia for attracting foreign direct investments in comparison with CEE countries", Tomislav Čorak from the Boston Consulting Group said that foreign direct investments in Europe increased by 6% in the past five years. Investments in industrial production are being gradually being restored, he underscores.

Čorak says that the structure of investments in Croatia should be changed because the added value of investments in hotel infrastructure is lower than investing in some high technology activities.

Despite creating favourable conditions for investments, it is necessary to actively pursue investment, Čorak said and added that it is necessary to detect specific companies which Croatia would like to attract.

Economy Ministry State-Secretary Zdenko Lucić underscored that Croatia had adopted one of the best laws in Europe to encourage investments but that it is not promoted enough and that that requires additional effort.

US Ambassador to Croatia, Robert Kohorst, said that following Croatia's success at the World Cup, Croatia is perceived positively but that will not create new jobs or bring investments and that it is necessary to actively seek investments to desired industries.

Kohorst underscored some positive aspect such as the country's security and its position in the region and that it can develop its business in the entire area and that it had the advantage of being a member of the EU.

The Coca-Cola HBC Croatia General Manager, Ruža Tomić Fontana, says that Croatia has a good regulatory framework for investment attraction, however, she called for speeding up the implementation of investments.

More news about the LNG terminal can be found in the Business section.