Adriatic terminal for liquefied natural gas prior to 2014

Croatian companies are going to change their investing structure in the project for construction of Adriatic terminal for liquefied natural gas (LNG) in order to make the terminal operational in 2014.

It is most likely that state companies Croatian Electric Power Company (HEP) and Plinacro will form a consortium, while petroleum industry Ina will enter the project independently.

At the same time, the decision on formation of LNG Croatia, which was the subject of negotiations of these three Croatian companies for more than year, is revoked.

The projected annual capacity of the future terminal that should be built on Krk island is 15bn cubic meters of gas. The terminal should be used for supply of gas to the markets of central and southeast Europe and Italy.

The project is a part of the EU's plan to diversify procurement of gas.

Four foreign power companies are interested in participation in the project as a part of the Adria LNG consortium - German E.ON-Ruhrgas, Austrian OMV, French Total and Slovenian Geoplin.

Croatian companies should join the project during this year with the share of 25% in joint investment. Ina should provide 14%, while Plinacro and HEP are expected to provide 11%.

The LNG Terminal project has been slowed down over the last few years, mainly due to slow decision-making process in Croatia. Foreign investors want to accelerate that process under the pressure of similar competitive projects on Italian side of the Adriatic.

The value of the investment is estimated at 800m EUR. Ina, 47% of which is owned by Hungarian oil company Mol, while Croatian Government owns 44% of the company, confirmed that it would stay in the project for construction of LNG terminal.

German RWE left the Adria LNG consortium in late 2009, while its share of 16.69% was transferred to the other members of the consortium.