SERVICES

EU approves support for Croatian LNG terminal

Brussels - The European Commission has found Croatian plans to support the construction and operation of a liquid natural gas (LNG) terminal at Krk island to be in line with EU State aid rules

Brussels - The European Commission has found Croatian plans to support the construction and operation of a liquid natural gas (LNG) terminal at Krk island to be in line with EU State aid rules. The project will contribute to the security and diversification of energy supplies without unduly distorting competition.

“The new LNG terminal in Croatia will increase the security of energy supply and enhance competition, for the benefit of citizens in the region,” said Commissioner Margrethe Vestager, in charge of competition policy. “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.”

The measures approved will support the construction and operation of a floating LNG terminal, consisting of a floating storage and regasification unit (FSRU) and the connections to the national gas transmission network. The LNG terminal is designed to transport up to 2.6 billion cubic meters per year (bcm/y) of natural gas into Croatia national transmission network as from 2021.

The total investment costs to build the terminal amount to 233.6 million euros. This will be financed through: a direct equity contribution of 32.2 million euros from the LNG terminal company shareholders; a contribution of €101.4 million from the Connecting Europe Facility, which is centrally managed by the European Commission, through the Innovation and Networks Executive Agency (INEA); a direct financial contribution of €100 million from the Croatian State budget. 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.

(Read more)

Pressed for time?

Get the best news of the week in your inbox

Subscribe ››