LNG Croatia Again Looking for Floating Terminal

By 3 August 2018

The never-ending story continues.

After two failed attempts, LNG Croatia is collecting new bids for the delivery of a floating liquefied natural gas (FSRU) terminal which will be located at Omišalj on the island of Krk. The deadline for the submission of bids is August 24, reports on August 3, 2018.

The first collection of bids for the FSRU was cancelled this spring by LNG Croatia because there was a change in the terminal’s technical characteristics, while the second tender failed because there were no bids which fulfilled all the conditions.

“During the procurement procedure, LNG Croatia received three bids before the deadline, and the fourth after the deadline. After reviewing and evaluating the bids, it was concluded that they were not fully aligned with the formal requirements as set out in the bidding documents, so they could not be considered valid. Therefore, the procurement procedure has been repeated,” said LNG Croatia, which did not provide information on who the bidders were and when the supplier of the floating terminal has to be chosen given the co-financing provided by the European Union. Late 2020 has often been mentioned as the deadline for the whole terminal to become operational.

According to unofficial information from business circles well acquainted with the LNG bids, two of the four bids received for the FSRU delivery came from Norway, including the one from Golar, a company for whom the construction of floating terminals is one of the core activities.

The global market for floating terminals is extremely centralized, and it is estimated that only four companies in the world, including Golar, can meet the required construction and delivery requirements. Therefore, it is even more interesting that LNG Croatia is repeating the tender since it has not received a valid offer.

Although the project of the LNG terminal on the island of Krk has been declared of the strategic importance in 2015, the special law was adopted in parliament just over a month ago. The LNG terminal is opposed by environmental protection associations, as well as some inhabitants of Primorje-Gorski Kotar County.

In the first phase, the project includes the installation of a floating terminal, which is a ship that should be used for storage and turning the LNG into gas and which will cost about 250 million euro. In the second phase, it should be replaced by a permanent, shore-based terminal.

The European Commission has accepted that the LNG terminal is of the strategic importance for the EU as well and has expressed readiness to invest 101 million euro in the project. At that time, the European Commission reported that the terminal would have a storage capacity of 180,000 cubic metres and the possibility of delivering about six billion cubic metres of gas annually.

LNG Croatia launched the process with this parameters, but this spring it was decided that the capacities should be lowered to 135,000 cubic metres of storage and 2.6 billion cubic metres of gas per year.

Many doubt whether the much-delayed terminal will ever be constructed.

Translated from (reported by Vedran Marjanović).