Wednesday, 10 May 2023

Azerbaijan to Become an Important Source of Gas for Croatia?

May 10, 2023 - Azerbaijan, a country on the border of Europe and Asia, could become a gas exporter to Croatia in the coming years, as Croatia is considering connecting to the gas pipeline there.

The morning fog hangs over the Caspian Lake, which some consider a sea because of its size and brackish water. At a distance of 70 kilometers lies the Shah Deniz gas field, with an area as large as the two largest Croatian islands, Cres and Krk, combined, as Poslovni writes.

Six oil companies extract gas from a depth of 600 meters, then press it into pipes that stretch to neighboring Georgia. From there, they go through Turkey and Greece to Albania. One branch then enters Italy, while the construction of the other, which would go through Montenegro and Bosnia and Herzegovina to Croatia, is being considered.

"Croatia supports this project. We believe it is important to have another additional supply route where the gas from Azerbaijan would reach Split, where our gas pipeline network goes," Croatian Economy Minister Davor Filipović recently said for Hina.

He and Prime Minister Andrej Plenković discussed this project in January with Azerbaijani President Ilham Aliyev at a forum in Davos, Switzerland.

"At that time, we talked with the representatives of Montenegro; we continued to talk with our friends in Bosnia and Herzegovina. There is a lot of interest in that direction, so I believe we will eventually do that project," adds Filipović.

The project, known as the Adriatic-Ionian pipeline, has been under consideration since 2012 when the Croatian natural gas transport company Plinacro and the Ministry of Economy began participating in meetings of interested countries. However, implementation was not started at that time because gas from Russia was cheaper, and the amount of gas from Azerbaijan was limited.

Everything changed five months after Russia invaded Ukraine.

The EU, which until then imported 40 percent of its gas from Russia, turned to liquefied gas from the USA, Norway, Algeria, and Azerbaijan.

Five hundred kilometers of gas pipeline to Split

The President of the European Commission, Ursula Von der Leyen, signed a strategic partnership agreement with President Aliyev in July.

"More than 10 European countries are asking us to increase deliveries," Aliyev said at the political Global Baku Forum. The country of the former Soviet Union exported a total of 19 billion cubic meters of gas in 2019 and plans to deliver 24 billion this year.

"Half of that will be exported to Europe," said Alijev, who visited Sarajevo last month.

Azerbaijani Energy Minister Parviz Šabazov Ogtaj says their goal is not only to increase the volume of existing partners "but to add new partners, including those in the Western Balkans."

The Adriatic-Ionian gas pipeline from the Albanian town of Fieri to Split would be 511 kilometers long.

With it, Croatia would get half of the total five billion cubic meters of gas per year, what would be its capacity, Plinacro reported on its website. He announced the completion of the project in 2025.

"It is difficult to talk about the time dynamics now because talks are still being held, but there is interest in all countries," says Filipović.

Croatia would export the imported gas and part of that from the LNG terminal on Krk to EU countries because these quantities would exceed the domestic needs of Croatian households and industry.

Filipović notes that Croatia wants to position itself "as the energy hub of this part of Europe" and help other countries with supply.

Land of fire, oil, and gas

The Shah Deniz field in the Caspian Lake was discovered in 1999, and production began in 2006.

Toghrul Velijev, an analyst at the Baku Research Institute, believes that Azerbaijan can meet five to six percent of the EU's gas needs from there. The European Commission reported last summer that Azerbaijan will deliver 20 billion cubic meters to the EU by 2027.

"That statement is too optimistic for both parties," says Velijev, who believes that his country can export between 12 and 13 billion cubic meters to the EU.

At the same time, traffic jams are forming on roundabouts in Baku. The streets are full of cars because a liter of the cheapest gasoline costs 0.53 euros.

"Almost everything here was built with oil and gas money," says taxi driver Orkhan as he passes between the opposites, blocks of concrete apartment buildings built during socialism and modern glass shopping malls.

On the postcards of Baku, there are three glass hotels with 30 floors, built in the shape of a flame.

"Azerbaijan, the land of fire" is a tourist advertisement from the jerseys of the football club Atletico Madrid in 2014, which played twice in the final of the Champions League.

Baku was one of the stadiums where the 2021 European Football Championship was played, and since 2017, Formula 1 races have been held on its streets.

Companies should increase their investments to continue the oil expansion, but some are restrained.

"For companies to be interested in investing in infrastructure and increasing exports, they need contracts for 20 to 25 years, not five years," explains analyst Velijev.

He notes that the EU initiative on reducing the use of fossil fuels

of fuels, including natural gas, makes companies reluctant to invest in infrastructure.

Hydrogen - solution or promise?

Currently, the world is discussing the use of hydrogen, which would be produced from renewable energy sources and transported through adapted gas pipelines.

"Hydrogen can be a solution, but it is more of a promise," says Dimitar Lilkov, an analyst at the Belgium-based Wilfred Martens Center for European Studies.

Hydrogen usage is currently below one percent worldwide.

"In the short term, it is not a solution, so in the coming years, the EU will still have to think about how to import natural gas and connect to various gas pipelines," believes Lilkov, who spoke about it ten days ago at the economic forum in Delphi.

Hydrogen could also go to Croatia through the future pipes of the Adriatic-Ionian gas pipeline.

"Plinacro will ensure these pipes are ready for hydrogen when expanding our gas pipeline network. We also have to think about the future," notes Filipović. "Everything we do now, we think about how to use it in the best possible way," he adds.

Work on the depths of the vast Caspian Lake continues while passers-by stroll carelessly along its shores. The glass shopping center, in the shape of a blossoming flower, attracts the residents of Baku to shops like those found in Western Europe.

"There are more and more modern buildings like this," says driver Orkhan. "And it will grow sky high and become more and more luxurious if oil and gas continue to be exported."

For more, make sure to check out our dedicated News section.

Wednesday, 21 September 2022

Guaranteed Croatian Gas Prices Until April 2023 for Some This October

September the 21st, 2022 - Croatian gas prices are set to be charged at a guaranteed price for some in the country, which will definitely result in a sigh of relief.

As Poslovni Dnevnik writes, all public service suppliers will have enough gas for households this winter season, emphasised Ivo Milatic, State Secretary in the Ministry of Economy after a meeting with gas suppliers that provide such public services.

About 100,000 people in the country who want to change their gas supplier and connect to the public service can wait for the cold weather to come in a more relaxed frame of mind, because gas from the new supplier should start arriving from October, and it will remain at the same price until April the 1st next year. There will be enough gas for all, but certain technical problems should be expected because a huge number of requests will need to be processed in a very short time.

This encouraging message was delivered by representatives of the Ministry of Economy on the sidelines of the recent Government session, which was chaired by Prime Minister Andrej Plenkovic recently after he recovered from COVID-19 and came out of isolation, as reported by Novi list.

State intervention

The Zagreb gas plant (GPZO) is under the greatest pressure from people who more than understandably want cheaper Croatian gas prices, a service to which about 70,000 people want to switch. Its director Jeronim Tomas said that the connection of new consumers is expected by October the 1st, with a guaranteed price set in stone. This should not be a problem, but it is important, he warned, to solve the technical difficulties implied.

''People will have to read all of their gas meters by the end of this month,'' Milatic pointed out, adding that everyone who wants to switch from market service to public service must be allowed to do so by October the 1st, 2022. However, he noted, this transition could take longer due to the large number of requests that have come flooding in, so there is a possibility that some time will pass before people begin receiving their first bills with these set Croatian gas prices on them.

"We asked HERA, the gas supplier and distributor, to publicly and clearly explain all this to the public by the end of the week," emphasised Milatic, adding that the suppliers do happen to run out of gas, the state is more than ready to intervene and help them.

"If one of the suppliers does begin to experience a supply problem, HEP Plin (Gas) is a guaranteed supplier and it would once again assume the obligation to supply those same people with gas,'' Milatic assured. The onslaught on public gas suppliers in many Croatian cities occurred after many smaller suppliers on the market could no longer deliver gas to people at more favourable prices.

Recently, the government lowered the price of diesel fuel, which now costs 12.29 per litre, a considerable 59 kuna less than before. Petrol will be being sold for 10.58 kuna, one lipa more, while the price of blue diesel will remain the same, which is 8.49 kuna per litre.

"Since diesel prices on the Mediterranean market dropped significantly on Thursday and Friday, we decided to go with this new regulation, because this reduction in the market will be reflected in the reduction of retail prices here," explained Davor Filipovic, Minister of Economy.

For more, make sure to check out our dedicated lifestyle section.

Sunday, 11 September 2022

Can Doubling of LNG Terminal's Capacities Satisfy Croatian Needs?

September the 11th, 2022 - Can doubling Krk's LNG Terminal capacity produce enough to satisfy the Croatian market's needs this winter?

As Morski writes, in order to tolerate the cold weather this winter, and in the absence of cheap Russian gas, some countries are urgently trying to establish floating terminals before winter, with which they would buy liquefied gas mainly from the USA, but also from other sources.

In August, the Croatian Government decided to invest an additional 180 million euros in expanding the capacity of the LNG Terminal on the island of Krk, and RTL reporter Boris Misevic spoke with the director of LNG Croatia, Hrvoj Krhen.

The current capacity of 2.9 billion cubic metres of gas is converted into 6.1 billion cubic metres, and as for the financiers, a smaller part of the money, 25 million euros of it, will go to the technical modifications of the LNG Terminal, and 155 million euros will go to the construction of the Zlobin Bosiljevo gas pipeline.

''Regarding capacity expansion of the LNG Terminal, we're going to make a technological modification on the vessel, so that we'll install one additional module for regasification and in this way we will increase the possibility of delivering the amount of natural gas into the system,'' explained Krhen, adding that there will be no problems with the supply, that the terminal will continuously supply gas, and that the operation itself will be completed within a period of thirty days.

When asked if they can fully supply the whole of the Republic of Croatia with gas in the event that the delivery of Russian gas stops, Krhen said:

''For the part of the year which requires heating that begins on October the 1st, we've announced 31 carriers, which is the equivalent of 2.7 billion cubic metres of natural gas that will reach the domestic market via the LNG Terminal. We believe that with domestic production and storage capacities, that gas will be available to our market. The LNG Terminal, along with production capacities and storage capacities, can meet the market's needs for natural gas,'' he emphasised.

When asked if there is a danger that the tenants of the terminal will transfer somewhere else and the gas eventually ends up not being supplied to Croatia, he said that there is no room to worry about anything of the sort occurring.

''We have six tenants and all these companies operate here on the territory of the Republic of Croatia and so far, considering the quantities delivered since the beginning of operations, which are over 3.2 billion cubic metres, the vast majority of this gas has remained here in the country,'' concluded Krhen.

For more, make sure to check out our dedicated lifestyle section.

Saturday, 30 July 2022

Gas Deal Between Croatia, Slovenia and Three Other EU members

ZAGREB, 30 July 2022 - In case of a real crisis in the supply of Russian gas and an EU emergency, member-states are expected to show solidarity, including by signing bilateral supply deals, and Croatia is currently preparing such an agreement with Slovenia, the Jutarnji List daily reports in its Saturday issue.

According to information available to the daily, talks will be held on solidarity deals also with Italy, Hungary and Austria, and they imply technical, legal and financial arrangements.

This mechanism was envisaged by a 2017 European regulation on supply security but so far only six solidarity deals have been signed in the EU. The first one was signed in December 2020 between Germany and Denmark, in late 2021 Germany and Austria signed such an agreement, and as many as four were signed this year - between Estonia and Latvia, Lithuania and Latvia, Italy and Slovenia, and Finland and Estonia.

The European Commission has in the meantime amended the regulation with articles which, if necessary, can be directly applied if there are no bilateral agreements.

The purpose of this is for countries to help one another in ensuring gas supply for their protected consumers (such as households and hospitals) also in the case of the biggest crisis.

Slovenia's minister said at an emergency European meeting on energy earlier this week that Ljubljana definitely wanted to conclude with Croatia an agreement to that effect before the end of the summer, and that a similar proposal had also been sent to Austria.

Under the latest EU agreement on reducing gas consumption by 15% in the period until the spring of 2023 (saving is currently voluntary but in case of an EU emergency, it will become compulsory), member-states need to update, by the end of the summer, their existing gas supply emergency plans and show how they intend to meet the reduction target, and report on it to the EC every two months.

As for members seeking solidary gas deliveries, they will be asked to show which measures they have taken to reduce domestic demand, the daily says.

For more, check out our politics section.

Wednesday, 6 July 2022

Croatia Loses Arbitration Case on INA to MOL

ZAGREB, 6 July 2022 - Croatia has lost an arbitration case regarding INA brought by the Hungarian oil company MOL, in which MOL alleged that the Croatian government did not honour its obligations from a gas business agreement, the Večernji List daily said on Wednesday. 

According to unofficial information, having lost the case, Croatia will have to pay between 250 and 300 million US dollars, including interest. Croatia's objections regarding corruption during the purchase of INA by MOL from the Croatian state were rejected as well.

The case was dealt with by the International Court for Settlement of Investment Disputes (ICSID) in Washington.

It was launched in 2013 by MOL, which claimed that Croatia had not honoured its obligations from a master agreement on gas business and its annexes.

Under that agreement, signed in 2009, INA was to divest a part of its (nonprofitable) gas business by having the state take over the underground gas storage facility at Okoli, which the state did, but it did not take over gas trade as well, which was the reason for MOL's lawsuit.

This is the second arbitration case Croatia has lost to MOL. The first one was dealt with by the UN Commission for International Trade Law (UNCITRAL).

Prime Minister Andrej Plenković in late 2016 said that Croatia would buy back MOL's stake in INA and the process is still under way.

MOL is the single largest shareholder in INA, holding 49.1% of the stock (4,908,207 shares), while the Croatian government holds 4,483,552 shares, or 44.8%. Private and institutional shareholders hold 608,241 shares, or 6.1%.

For more, check out our business section.

Tuesday, 31 May 2022

Greenpeace Adriatic Protest Held in Front of Tanker Headed for Omisalj

May the 31st, 2022 - A Greenpeace Adriatic protest was held in front of a large tanker (SCF Samotlor) headed for the Port of Omisalj, which was transporting Russian oil.

As Morski writes, Greenpeace activists protested recently in front of the SCF Samotlor tanker, which was transporting Russian oil to the Port of Omisalj. They staged a protest ahead of a recently held European Union (EU) summit, urging EU political leaders to urgently impose an embargo on all Russian fossil fuels and speed up the energy transition to renewable energy and energy efficiency.

Greenpeace pointed out that since the beginning of the war in Ukraine back in February, EU countries have spent more than 54 billion euros on Russian oil, gas and coal, which turns out to be co-financing the war still going on in ravaged Ukraine.

Hundreds of millions of euros continue to flow from EU countries into the Kremlin in exchange for Russian fossil fuels, and EU leaders have still failed to impose sanctions that would effectively curb this, what they deem to be an utterly immoral trade. In other words, and in the opinion of those who held the recent Greenpeace Adriatic protect, the European Union is still co-financing the war in Ukraine and such a practice must stop immediately.

''The EU must finally show true solidarity and impose an embargo on all Russian fossil fuels. No delays, no legal loopholes, no special treatment and exemption for any country,'' warned Eszter Matyas, campaign manager at Greenpeace CEE.

The Greenpeace Adriatic protest took place the day before the aforementioned summit, and the European Commission has proposed phasing out Russian oil imports in most EU member states, but not before the end of this year. Some countries like Hungary, Slovakia and Bulgaria could get even more time permitted. Recent comments from European Commission President Ursula von der Leyen show that EU leaders are nowhere near an agreement, Greenpeace warned.

''The humanitarian catastrophe in Ukraine will only continue to deepen if a weak embargo is imposed, or if nothing is imposed at all. The war in Ukraine should be a wake-up call for European Union leaders. Security in a world powered by fossil fuels simply doesn't exist. The current ban on all Russian fossil fuels can and must be a strong impetus for the development of renewables and energy efficiency across Europe. It's important not only because of climate security, but also because of its independence from autocratic regimes that trade in fossil fuels,'' said Petra Andric from Greenpeace Croatia.

The majority of oil consumption in the EU is accounted for by transport, while the EU is dependent on imports for as much as 97% of its oil products. A study commissioned by Belgium's Greenpeace offers guidance to those responsible for decarbonising Europe's transport sector by 2040, which could be powered by renewable energy without relying on biofuels. The International Energy Agency (IEA) recently announced that a limited set of short-term transport measures could reduce consumption by as much as 2.7 million barrels of oil per day over the next four months. In Germany, short-term measures could reduce Russian oil imports by about a third, the global organization warns.

When it comes to the Greenpeace Adriatic protest, activists have also held similar protests in Ukraine since the start of the war, calling for an embargo on Russian fossil fuel imports to European countries including Germany, France, Italy, Poland, Greece, Hungary, Denmark, Norway, the United Kingdom and Croatia in late March.

For more, check out our lifestyle section.

Friday, 20 May 2022

Construction of 2nd Croatian Underground Gas Storage Facility Begins

May the 20th, 2022 - The construction of the second Croatian underground gas storage facility is now underway following approximately sixteen very long years of discussions on the matter.

As Poslovni Dnevnik/Darko Bicak writes, after almost sixteen years of discussions and plans to build the second Croatian underground gas storage facility (PSP) Grubisno Polje (GP), the war in Ukraine and the ensuing energy crisis have suddenly made such strategic facilities very desirable and deeply necessary.

Although activities on the project began in parallel with the Russian attack on Ukraine back in February, the start of works on the new Croatian gas storage facility were inaugurated just a few days ago in Grubisno Polje by the new Minister of Economy and Sustainable Development, Davor Filipovic.

Unlike the existing "large" gas storage facility, PSP Okoli, with a capacity of about 550 million cubic metres of gas, PSP GP will be smaller, about 40 million m3, but it will be a flexible, or peak, storage unit.

The concession is relatively small, which in practice means that despite the large storage capacity, it will take a long time, especially if its occupancy falls below half, to release this gas into the Croatian energy system. The PSP GP will be developed in two phases and the total estimated value of the project is around 500 million kuna. It is estimated that the new Croatian gas storage facility could be in operation by the year 2027 at the very earliest.

Vlado Vlasic, the director of PSP, pointed out that currently, this project, both for PSP and for society as a whole, is the most important development and investment activity in Croatia.

"After a full 35 years since the commissioning of the storage facility in Okoli, the company PSP, as the operator of the Croatian gas storage system, is building another Croatian gas storage facility. Today, when the whole of the EU is dealing with the issue of providing people with the necessary energy sources, we're here to mark the beginning of the construction of a strategically important energy project.

Market disturbances

Over more recent years, the energy market has become very flexible through stock exchanges, enabling a secure and mostly cheap supply of gas, oil and electricity itself from global sources. As a result, strategic gas storage facilities have become questionable, as was the case here in Croatia last year.

However, situations such as Russia's aggression against Ukraine and the West's reaction to it by imposing sanctions have called the security of the supply into question, and prices have increased several times over. That said, the war in Ukraine will not last forever, and energy traders are aware of that.

Owing to all of these variables, it's almost impossible to estimate what the situation on the gas market will be by 2028, when PSP Grubisno Polje will certainly be in operation - both in terms of the security of supply and prices on the global market, and in terms of increasing energy transition in which there is less and less space for gas.

For more, make sure to check out our business section.

Wednesday, 27 April 2022

How Certain is it that Russia Will Suspend Gas to Croatia?

April 27, 2022 - Economist Damir Novotny was a guest on N1 Television's ''Novom Danu'', and commented on how certain is it that Russia will suspend gas to Croatia based on recent threats to Bulgaria and Poland.

Novotny said Russia's threat to stop supplying gas to Poland and Bulgaria is in some ways a warning to the entire European Union, as the Polish and Russian governments clash most verbally, reports Index.hr.

The economic analyst pointed out that he did not think that Russia would make a decision to stop supplying gas to Croatia.

"It is possible that Russia will suspend gas to Croatia, of course, but it is uncertain and we cannot predict anything because the Russian political elite is unpredictable at the moment, Putin's decisions are completely unpredictable, we cannot be sure about the direction of his decisions, especially economic ones'', said Novotny.

''He told the Russian public that the sanctions did not cause any damage to the Russian economy, which is simply not true. So I don’t believe there will be drastic blockades'', added Novotny.

What does an early warning about the gas situation mean?

He also explained what the government's early warning measure due to the gas situation means.

"This is a mechanism used by the governments of all European countries when gas storage facilities are emptied over the winter and refilled over the summer, and if the storage tenants do not refuel or do not fill it with that dynamic, prices are high and they are expected to fall over the summer to refill them, but that’s ungrateful because it’s hard to estimate gas prices at the moment. It is possible that it will start to descend during the summer, but it is not certain. All supply chains will be disrupted, Russian gas will not come to the EU market in the amount we are used to and prices will not fall over the summer'', Novotny said.

As for the norms of strategic stocks, he said that, according to publicly available information, we are below those stocks in terms of the amount of gas.

Gazprom: We are suspending gas supplies to Bulgaria and Poland

Recall, Russian energy giant Gazprom claims to have cut off all gas supplies to both Bulgaria and Poland after both countries refused to start paying for deliveries in rubles.

Earlier, both Polish and Bulgarian gas suppliers said they had received official notifications from Gazprom that supplies would be suspended.

At one point early Wednesday, physical gas flows along the Yamal-Europa gas pipeline from Belarus to Poland fell to zero, but then gas supplies resumed. But then Gazprom confirmed that gas supplies to Poland and Bulgaria were suspended.

For more, check out our politics section.

Tuesday, 5 April 2022

How Much Gas Can Croatia Obtain from Omisalj LNG Terminal?

April the 5th, 2022 - Just how much gas might Croatia actually be able to obtain from the Omisalj LNG terminal? With tensions with Russia over the gas supply increasing ever since that country's invasion of neighbouring Ukraine, tough questions need to be asked.

As Marinko Glavan/Morski writes, after Prime Minister Andrej Plenkovic stated at a recently held EU summit that Croatia had almost completely eliminated its dependence on Russian gas by building a floating LNG terminal on Krk, and that an analysis was being drawn up in order to to increase the capacities of the existing terminal, Novi list sent some questions about those capacity increases to LNG Hrvatska, which manages the terminal, Plinacro, which manages Croatia's natural gas transmission system, and the Ministry of the Economy and Sustainable Development.

To what extent can the capacities of transshipped liquefied natural gas and its gasification at the Omisalj LNG terminal be increased, and can Plinacro's transport system accept larger quantities of natural gas than those provided by the current maximum capacity of the LNG terminal?

The current maximum capacity of the LNG terminal on Krk is about 2.6 billion cubic metres of natural gas, as much as the terminal, at least in theory, can deliver to the transport system. This figure is approximately equal to or slightly less than the annual gas consumption in Croatia, taking into account that Croatia still meets slightly less than a third of the gas needs from its own fields, and the LNG terminal capacities are adjusted to the transport system in Plinacro from Krk to the rest of the country and further afield, if necessary, to Hungary and third countries.

The competent Ministry responded with a very brief response to the same question, saying that the possibilities of increasing the capacity of the terminal were being examined.

''Technical analyses conducted by LNG Croatia and Plinacro are underway in order to consider the possibilities of increasing the shipment of gas from LNG terminals,'' the Ministry of the Economy and Sustainable Development replied. A similar answer came from Hrvoje Krhen, the director of LNG Croatia, the company that manages the Omisalj LNG terminal.

''We're currently conducting analyses and testing the possibility of increasing the amount of gas we can deliver to the system. For now, it's too early to say how many quantities could be involved, but next week we'll know more and then we'll inform the public about it. Possibilities of an increase do exist, and analyses will show exactly how much it will be,'' said Krhen.

Plinacro didn't provide a concrete response as to how much natural gas from the Omisalj LNG terminal could be accepted by their transport system, and Novi list unofficially found out how they are conducting tests in order to determine this more precisely.

How LNG Croatia and Plinacro intend to increase production remains to be seen, especially in light of the fact that almost one hundred percent of the Omisalj LNG terminal's capacity has been leased so far and that in the current circumstances and production parametres, there is little room for significant increases. Fifteen more ships with liquefied natural gas cargo are planned to arrive at the Omisalj LNG terminal by the end of this gas year.

The Russian invasion of Ukraine 

In the first year and two months of being in operation, the liquefied natural gas (LNG) gasification terminal in Omisalj delivered 1.9 billion cubic metres of natural gas to the Plinacro transport system, and about 95 percent of the gas imported through the Omisalj LNG terminal was consumed or stored in Croatia. Since the beginning of its operation, the Omisalj LNG terminal has covered significantly more than half of the total Croatian consumption, which stands at around 2.8 billion cubic metres per year.

In addition, the Omisalj LNG terminal gained in importance with the start of the Russian invasion of Ukraine, which resulted in various forms of sanctions against Russia, to a lesser extent from European Union and non-EU European countries and more from the US, leading to uncertainty over gas supplies to European markets which are largely dependent on Russia.

Terminal capacity lease agreements have been concluded with INA, HEP, MFGK, MET Croatia Energy trade and Powerglobe Qatar, with the two Croatian companies having only a small part of the leased capacity, just over 500 million cubic metres, while the largest part is held by MFGK and MET Croatia Energy trade, which are closely connected with Hungary, through which the first import quantities of natural gas for that country, which doesn't come from Russia, were contracted.

Although the Omisalj LNG terminal can cover almost one hundred percent of Croatia's needs with its own capacities, it should be taken into account that the final word on the market to which the gas will be delivered belongs to the tenants. In the past, for a little over a year, it has obviously suited tenants to exchange gas from Croatian LNG terminals with Russian distributors for gas from the pipeline, thus avoiding paying excessive transport fees. Whether this will be the case even if the supply of Russian gas is cut off remains to be seen, at least, judging by the reactions of Hungary, Germany and some other EU countries so far, the interruption of Russian gas supply isn't likely, Novi list writes.

For more, check out our lifestyle section.

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