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Croatia chooses Krk island for LNG terminal

  Croatia’s government said on Tuesday it has chosen the northern Adriatic island of Krk for a liquefied natural gas terminal, state news agency Hina reported.

 

The terminal will be built in the town of Omisalj by a consortium of five foreign and three Croatian energy firms. It is expected to be operational by 2014. The LNG project is aimed at lowering central Europe’s dependency on Russian pipeline gas. „Now we have paved the way for preparations for building the terminal to begin,” Deputy Prime Minister Damir Polancec told the cabinet. The site selection process lasted two years because nine locations in the northern Adriatic were considered. Conservation groups, concerned that the choice of location would affect Croatia’s lucrative tourist industry, pressured the government to conduct an environmental impact study.

The five foreign partners in the project are Austria’s OMV, French oil company Total, German utility RWE’s subsidiary Transgas, Slovenia’s Geoplin gas company and Germany’s E.ON-Ruhrgas. The Croatian partners, which want a combined 25% stake in the consortium, are oil and gas group INA, state power board HEP and gas company Plinacro.

The investment is worth between €700 million and 1 billion ($1.43 billion). The terminal is planned to have initial capacity of about 10 billion cubic meters (bcm) of gas per year which may be increased to 15 bcm later. LNG, gas cooled to a liquid state for shipment on tankers, is reheated on arrival at a terminal and pumped into pipeline grids. (Reuters)