Thursday, September 24, 2020
Home Oil & Gas Krk LNG terminal receives new capacity booking from MFGK Croatia

Krk LNG terminal receives new capacity booking from MFGK Croatia

MFGK Croatia, subsidiary of the Hungarian state-owned energy group, MVM, has booked LNG regasification capacity at the Krk liquefied natural gas (LNG) import terminal of 6.75 billion cubic metres (bcm) from 2021 until 2027, according to the statement of LNG Croatia, the developer and operator of the terminal.

Hrvoja Krhen, recently appointed Managing Director of LNG Croatia, underlined that as the LNG terminal has received a fourth user, it can certainly start operating on 1 January 2021, as planned.

In his recent interview with CEENERGYNEWS, the director of LNG Croatia spoke about potential partners, confirming that they were in communication with all interested potential terminal users from the region. Mr Krhen noted that Hungarian companies are interested in terms of cooperation to become terminal users.

At the beginning of May, MET Croatia Energy Trade announced that it submitted a binding offer to LNG Croatia to book capacities in the LNG terminal for a three-year period, amounting to 1.3 billion cubic metres overall. Croatian grid operator HEP and Zagreb-based refiner INA Industrija Nafte, which is controlled by Budapest-based MOL, have also booked capacity earlier.

MFGK Croatia booked 0,666 bcm capacity for Gas Year 2020/2021 which starts from 1 January 2021 until 30 September 2021, and 1,014 bcm for every year until September 2027. With the offer of MFGK Croatia, the reservation of the total capacity of the terminal increased to 80 per cent, on average to almost 2 bcm per year. According to earlier statements of the operator, an estimated 1.5 billion cubic metres are required to make the investment in the construction of the terminal profitable.

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

The KrK LNG project has been included in the lists of European Projects of Common Interest since 2013, given that the terminal will deliver gas to the Croatian national transmission network, connected with Slovenia, Italy and Hungary, as well as with other EU countries via non-EU Member States such as Serbia and Montenegro.

“The LNG terminal on the Island of Krk is a strategic project in terms of security of supply and diversification, not only for the Republic of Croatia but for EU as well,” highlighted Mr Krhen adding that the terminal will ensure energy needs and increase the security of supply through the new natural gas supply route for the countries of Central and Southeastern Europe.

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