Hrvatska LNG Terminal

This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor and the Center for Media and Democracy.

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Hrvatska LNG Terminal (also known as Krk LNG and LNG Croatia) is a proposed floating LNG terminal under construction in Croatia.

Location

The map below shows the location of Omišalj, the approximate location of the project, on the island of Krk, in Primorje-Gorski Kotar County.

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Project Details

• Owner: Golar Power
• Parent: LNG Croatia LLC
• Location: Omišalj, Krk Island, Primorje-Gorski Kotar County, Croatia
• Coordinates: 45.066667, 14.6 (approximate)
• Capacity: 2.6-7 billion cubic meters per year The maximum capacity will eventually be 7 billion cubic meters per year.
• Status: Construction
• Type: Import
• Start Year: 2020

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Hrvatska LNG Terminal is a proposed floating liquefied natural gas (FLNG) regasification terminal in Croatia. The project was originally planned to be an onshore regasification facility, but was switched to a FLNG proposal in 2016. The project is a part of the European Union's Projects of Common Interest (PCI), making it eligible for public funding. According to the European Commission, it is receiving 124,030,500 EUR ($137,425,006.41 USD). The project includes construction of an 18 km Hrvatska Gas Pipeline, which will act as an extension of the existing Hungary-Croatia interconnection (Városföld – Slobodnica), providing 2.6 bcm/y from the LNG terminal to the Croatian gas transmission system. The maximum capacity will eventually be 7 billion cubic meters per year.

The project was originally planned to go into service in 2018. In February 2017, the project was awarded US$109 million under the European Union's Connecting Europe Facility (CEF). The project would cost about US$418 million in total. As of May 2017, the investment decision had been pushed back to Q1 2018.

In August 2017 it was reported that preliminary work had started on the terminal, with commissioning planned for 2019. Initial annual capacity is planned to be 2 billion cubic meters (1.5 mtpa) and may be increased to 5 billion cubic meters (3.7 mtpa).

In November 2018 LNG Croatia selected Golar Power and its proposal to convert an existing LNG carrier to an FSRU at a cost of 159.6 million euros ($180.8 million). At a December 2018 auction two Croatian companies, INA and HEP, expressed interest in buying up to 520 million cubic meters of gas per year, representing just a third of the terminal's annual output.

As of September 2019, the project was still on track to start operations in January of 2021, and begin turning profits in 2025. Once online, the terminal will have an annual capacity of 2.6 billion cubic meters of gas, equivalent to the country’s annual usage. The EU contributed 101 million euros ($111 million) to develop the Krk terminal, with the Croatian government matching the amount and national grid HEP d.d. and state-owned gas pipeline operator Plinacro d.d. adding about 15 million euros each. The project is the first of its kind for Croatia, which has the EU’s fifth-longest coastline, and is the result of the U.S. lobbying to reduce the country’s need for Russian gas.

According to Gas Infrastructure Europe, construction was underway as of December 2019.

Opposition

Due to environmental and economic concerns, the terminal remains largely unpopular among local residents. According to Food and Water Europe, "...the project is now strongly opposed by all local municipalities from Krk Island, the Primorje-Gorski Kotar County and by local environmental NGOs."

Local opposition groups cite concern over how the terminal will impact the bay and its marine life. The terminal plans to use sea water from the bay in the process of converting product from a liquid to a gas, which will cool the water, leading to environmental consequences for the small bay. The terminal operators also plan to use chlorine to protect the pipes against algae and shells, which will cause further environmental damage. Local groups opposing the terminal include Zelena Akcija and Eko Kvarner. Environmentalists and Krk local municipalities organized a protest against the terminal in March of 2018. Meanwhile, the government passed a new law which would speed up construction of the terminal.

Despite opposition, the project received more than €100 million in financial support from the European Union's Projects of Common Interest program in February 2017, and a €339 million loan from the European Investment Bank in 2016. Given the large public investments required for the project, some stakeholders have speculated that the terminal is not a commercially viable.

International opposition has warned that the terminal would likely be importing fracked gas from America, making it a particularly detrimental project for the climate.