Croatia to expand capacity of floating LNG import terminal to 6.1 Bcm/year: PM

Croatia plans to expand the capacity of its floating LNG import terminal at the island of Krk to 6.1 Bcm/year, Prime Minister Andrej Plenkovic said June 20, in order for Croatia to play a more regional gas supply role.

The FSRU -- whose capacity has already been increased to 2.9 Bcm/year -- began operations in January 2021 with a capacity of 2.6 Bcm/year and is the first LNG import facility to serve the Balkan region directly.

Speaking in Riga during a summit of the Three Seas Initiative -- a grouping of 12 central and eastern European countries founded in 2016 -- Plenkovic said it should be a priority of the initiative to improve energy interconnections, particularly in the wake of Russia's invasion of Ukraine.

"In the altered circumstances, energy infrastructure is now clearly defined as critical infrastructure," Plenkovic said. "To be better linked, better connected, to provide energy supply security to each other, should be the priority of the initiative," he said.

Plenkovic said the expansion of Croatia LNG would contribute to that aim. "We are going to increase its current capacity from 2.9 Bcm to 6.1 Bcm, going far beyond the needs of our industry and households, so as to play a regional role," he said.

Since it started operations in January 2021, the terminal has received a total of 32 cargoes, representing a volume of 2.86 Bcm of gas equivalent, according to data from S&P Global Commodity Insights.

It struggled to secure LNG cargoes for most of 2021 -- with only 13 cargoes supplied in the first three quarters of the year -- as higher Asian LNG prices drew cargoes away from the European market.

However, higher European prices saw LNG supply into Europe pick up significantly toward the end of 2021, with European prices continuing to hold a premium over spot Asian LNG prices into 2022.

According to Platts price assessments by S&P Global, the TTF contract for August delivery was priced at $37.98/MMBtu on June 20, while the equivalent JKM spot LNG price was assessed at $36.05/MMBtu.

US supplies

The US has been the dominant supplier to the Croatian terminal since it began operations, delivering 21 of the 32 cargoes to date, data from S&P Global showed.

Seven cargoes were delivered from the Freeport facility -- which is currently closed after a fire earlier this month -- five from Sabine Pass, four from Corpus Christi, two each from Cove Point and Cameron, and one from Elba Island.

Of the remaining 11 cargoes delivered to date, two each were supplied from Nigeria, Egypt, and Qatar, and a single cargo was imported from Trinidad and Tobago.

There were also four reloads -- two from Greece and one each from Belgium and France.

The original bookers of long-term capacity at the facility include Croatian utility HEP, and the Croatian subsidiaries of Switzerland-based trader MET and Hungary's MFGK.

Croatia LNG -- a joint venture of Croatian players Plinacro and HEP -- is the operator of the FSRU project.

The project operator took FID on the Croatian LNG project in 2019 after the Croatian government decided to give it a grant of Eur100 million ($117 million) towards the total estimated cost of Eur234 million.

That was in addition to funding of Eur101.4 million from the European Commission.