LNG Floating Terminal a Reality: Government Gives Thumbs Up

By 9 June 2016

Selected investors are ready to begin negotiations, while operations could begin in 2018

Within the next three months a contract with strategic investors will be signed for the building of a floating LNG terminal on Krk island, announced optimistically Prime Minister Orešković at a government session, which unanimously decided to order relevant ministries and LNG Croatia company to speed up the process. Economy Minister Tomislav Panenić reminded that the LNG terminal was named a strategic project last year, included in the European Strategy of Liquefied Natural Gas Storage, writes on June 8, 2016.

The optimism shown by Orešković is based on reality, says Minister Panenić, as the floating terminal is phase one of four of this project, which includes, given interest and market demand, a land terminal, for which a large portion of project preparation has been completed. In other words, the existing documentation and permits for phase one will be used for others, while talks with investors who answered the call for the LNG terminal will continue.

In the following weeks the current study would be adapted, assessing the value of undertaken activities in project preparation and the involvement of the state in the floating terminal and the relation with the strategic investor. Details are still unavailable on potential investors who passed procedure and assessment and entered into a small circle for negotiations.

Unofficially, only a few made it through the process, namely Lithuanian Kalipedos Nafta, Spanish Enagas and European Energy Investment Fund, made up of European Investment Bank, Polish PKO Bank, German KfW, French Caisse des dépôts et consignations, Itlaian Cassa Depositi e Prestiti Spanish Instituto de Crédito Oficial. Those candidates are interested in further project development, especially since the starting investment is smaller than for a land terminal, as the ships used come with full crew and equipment, financed in annual instalments.

For the past several weeks an economically viable model has been developed, Panenić said. The floating terminal would have three times less capacity compared to a land version, around 2 billion cubic metres and if all goes to plan, should be operational in 2018.