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News 11 Feb 15

Croatia to Include Serbia in Gas Pipeline Project

Croatia's economy minister has confirmed reports of Serbia's likely inclusion in a planned gas pipeline project, transporting natural gas from the Croatian island of Krk to Hungary.

Sven Milekic


Croatian economy minister Ivan Vrdoljak.

Ivan Vrdoljak, Croatian Economy Minister, on Wednesday confirmed reports carried  by the Serbian daily newspaper Blic about Serbia’s likely inclusion in the planned gas pipeline running from Croatia to Hungary.

Blic reported on Tuesday that, at the 51st Munich security conference, a forum gathering heads of states and ministers on security issues, the US had offered to secure Serbia a connection to the planned gas supply.

The plan is to construct a gas pipeline connecting the natural gas terminal on Krk island in northern Croatia to Hungary.

Serbia would then build its own pipeline to connect up to the Hungarian one.

The project aims to supply gas to Hungary, Slovenia, Serbia and beyond. Croatia itself consumes about 3 bcm annually, with domestic sources providing 60 to 65 per cent. The cost of the terminal is estimated at about 600 million euros.

Vrdoljak meanwhile stressed that Croatia was “an important factor” in regional energy strategies, adding that Croatia would “include Bosnia and Herzegovina as well as Serbia” in its energy projects.

“The priority projects are not only the LNG [the Krk gas terminal] but also the pipelines, while Croatia becomes a country that should help this region get a new gas supply route,” he added.

Vrdoljak stressed that building the gas terminal was supported by both the US and the EU, since it was seen as playing an important role in boosting regional energy security.

“This is a top issue, not only in the State Department, who give us full support, but also in Brussels, which also gives us full support on this issue,” Vrdoljak concluded.

The US champions the LNG terminal in Croatia as part of plans to raise the level of energy security in the region and erode Russia's semi-monopoly on the gas supply.

It is estimated that building the infrastructure to transport gas to Hungary will take a year, while Serbia would need to build its connecting pipeline in the meantime.

Serbia is currently paying a relatively high price for gas transported from Russia through Ukraine, Slovakia and Hungary.

Although Serbia has good relations with Russia, it still needs an alternative gas supply route due to the possible suspension of the Russian gas supply to Ukraine.

Jelica Putnikovic, editor of Balkan Magazin, stressed that Serbia needs to look for an alternative gas supply route, not only because of the risk to the Russian gas supply to Ukraine, but for other reasons.

“Everyone should have a secure alternative. If we have it, we will be able to successfully negotiate the prices,” she noted.


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