INA to Buy Slovenian “Fracking" Gas

By 2 August 2016

For a British-Slovenian gas producer, this was an optimal solution.

INA will purchase natural gas from the two wells at Lendava in south-eastern Slovenia, and transport it to its Central Gas Station in Molve for further processing and cleaning, according to the contract signed by INA and the British-Slovenian company Geoenergo which has a concession for drilling and gas exploitation in the so-called Mura Depression area, reports on August 2, 2016.

The contract for the sale of the natural gas in its untreated state and transport via a pipeline to Molve was signed on Monday. All the necessary papers for the beginning of the production at two Geoenergo’s wells are expected to be completed within five months and test production should start in December of this year.

The two test fields where Geoenergo and its foreign partner Ascent Resources have found gas have been researched for several years and the findings show that there are profitable quantities, but the project has met with the opposition from local environmental groups. After the administrative procedure, Slovenia withdrew an already issued permit to Geoenergo and its British partner to build a station to clean the gas in the vicinity of the wells. Therefore, as an alternative solution, they decided to sell the gas to INA, since without a cleaning facility they would not be able to reach the Slovenian gas network and consumers.

For Slovenian environmental NGOs and for some of the country’s politicians, the problem is that in the north-eastern Slovenia, where gas was also exploited in the 1950s and 1960s, natural gas is now being extracted using the “fracking” technology, which allegedly has negative consequences for the environment and groundwater.

Investors say that they are disappointed with the negative reactions to their project, which are reflected in the decision of the Administrative Court to revoke the licenses that would allow for the gas cleaning. They add that their investment in Slovenia would have generated 20 million euros of added value in five years, and much more if the gas pumping continued unhindered (the reserves are estimated at 25 years).

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