Tuesday, 9 November 2021

Slovenian Petrol Not Interested in Croatian Oil and Gas Exploration

November the 9th, 2021 - Croatian oil and gas exploration isn't of particular interest to Petrol from neighbouring Slovenia following the postponement of the conclusion of an exploration contract.

As Poslovni Dnevnik/Marija Brnic writes, before the Slovenian Petrol completed their acquisition of Crodux Derivati Dva (2), the company informed the Croatian Ministry of Economy and Sustainable Development this summer that it was giving up on its exploration mission on two onshore fields, namely S11 and S12, for which it received a concession back in the August of 2019.

According to the official explanation as to why Croatian oil and gas exploration was being put back on the shelf, Crodux first asked for a postponement of the conclusion of the exploration contract and the division of hydrocarbon exploitation, and then reported that they were giving up on the exploration entirely. The exploration period for the above-mentioned fields was set to last five years, and in the event that gas or oil did end up being found, a 25-year period of its subsequent exploitation would have followed.

The Croatian Government's explicit permission for this was a precondition for opening a contract negotiation procedure, followed by the signing of the said contract, but Crodux first cited various difficulties due to the ongoing coronavirus pandemic, and asked for a postponement of the conclusion of the contract, before giving up on it entirely.

The aforementioned ministry received the notification back on June the 7th, and Ivan Cermak withdrew from the position of President of the Management Board of Crodux, which was in the process of taking over from Petrol slightly earlier on, more precisely on June the 1st, meaning that it can be concluded that the new owner of Crodux has no interest in continuing Croatian oil and gas exploration, at least at the moment.

After the withdrawal, a bank guarantee was activated, which pumped a massive 3.75 million kuna into the Croatian state budget.

For more, make sure to check out our dedicated business section.

Tuesday, 3 March 2020

Construction of Omišalj-Zlobin Gas Pipeline Going as Planned

ZAGREB, March 3, 2020 - The construction of a gas pipeline for the LNG terminal along the Omišalj-Zlobin route is going according to plan and the completion of that HRK 430 million investment is planned for the end of this year, the Plinacro natural gas transmission company reported on Tuesday.

The construction works, which began in mid-December, are being conducted along the entire gas pipeline route from the future Zlobin hub to the future intersection in Omišalj, Plinacro said in a press release.

Preparations have been conducted along the entire route with 60% of the required trenches already dug out and some sections of the pipeline already put in place in the trenches. Welding has also commenced and work at the intersection sites are underway.

Intensive activities are being conducted on Krk island so that that part of the construction can be completed before the tourism season.

The works should be completed and be ready once the LNG terminal becomes operational to start shipping gas from the terminal along the pipeline.

After the completion of the construction of the first compressor station on Croatia's gas transmission system in Velika Ludina, this is the second largest project of Plinacro's third investment cycle launched in 2018.

The project was supported by the European Commission and received a grant of a little more than €16 million for the costs of construction.

More energy news can be found in the Business section.

Wednesday, 19 February 2020

EBRD and USAID Assist in Connecting Croatia and Bosnia Gas Pipelines

ZAGREB, February 19, 2020 - Representatives of the BH-gas company, the European Bank for Reconstruction and Development (EBRD) and the US Agency for International Development (USAID) on Wednesday signed a grant agreement in Sarajevo for a project to connect Bosnia and Herzegovina's and Croatia's gas networks.

BH-gas, which is the largest gas provider and distributor in Bosnia and Herzegovina, said in a press release that the agreement would activate funds earmarked for environmental impact and feasibility studies for the South Gas Interconnection project.

The project involved building a gas pipeline from Zagvozd in southern Croatia toward Posušje and on to Travnik in Bosnia and Herzegovina, with a special pipeline branching off to Mostar.

The project would secure an additional gas supply route for Bosnia and Herzegovina which has been entirely dependent on Russian gas for decades via a trunk pipeline through Serbia.

The project was launched because the Republika Srpska entity authorities refuse to agree to connecting the two countries' gas networks along the shortest and cheapest route, running from Slavonski Brod to Bosanski Brod.

Northern areas of Bosnia and Herzegovina located in the Serb entity still do not have access to gas as an energy product and the authorities in Banja Luka want to build a new pipeline that would pass exclusively across the entity's territory and be connected to Serbia's gas network.

USAID is providing $500,000 for the South Gas Interconnection project while the remaining costs will be covered by the EU.

BH-gas expects the project documentation to be completed by the end of the year.

More energy news can be found in the Business section.

Friday, 17 January 2020

First Compressor Station in Croatian Gas Transport System Put in Operation

ZAGREB, January 17, 2020 - The first compressor station in the Croatian gas transport system was formally put in operation on Friday, with Prime Minister Andrej Plenković saying that this investment marked a strategic step that would change Croatia's position on the gas supply market.

The compressor station at Velika Ludina, about 60 kilometres east of Zagreb, is the technologically most complex structure in the Croatian gas transport system. The gas pipeline operator Plinacro has invested 209.5 million kuna (28.3 million euro) in the project, launched in mid-August 2018.

The compressor station will increase gas supply security and enable bi-directional capacity at an interconnection with Hungary, thus enabling the transport of gas from the LNG terminal on Krk island to Hungary and third countries.

Prime Minister Plenković said that this installation, given that it enables bi-directional gas transport, gave a new, strategic dimension to energy and gas supply security in Croatia and opened up new possibilities for cooperation with Hungary and other countries in central and eastern Europe.

"This project also gives meaning to the LNG terminal project on Krk island, which is of paramount importance politically and strategically," the PM said.

Plenković said that the Velika Ludina project showed that Plinacro had a strategic role and was part of both the national critical infrastructure and the European critical infrastructure. He added that installations like this were concrete examples of strengthening the energy infrastructure in Croatia and Europe.

The investment is in line with EU regulation and the goals of the Croatian energy development strategy. Plenkovic said he expected Plinacro to also invest in other projects relating to energy security, particularly in natural gas. As a positive example, he mentioned the construction of a new gas storage facility in Grubišno Polje, about 130 km east of Zagreb.

Asked by the press if he was worried about the currently modest interest in the lease of the LNG terminal capacity, Plenković said that this was a strategic project which had its purpose and that the issue of lease would be dealt with as the project neared completion, citing ongoing talks with Hungarian companies.

Plinacro's CEO Ivica Arar said that the company had begun work on a delivery gas pipeline for the LNG terminal on the Omišalj-Zlobin section.

More energy news can be found in the Business section.

Tuesday, 26 November 2019

Croatia's Electricity, Gas Prices Slightly up in H1

ZAGREB, November 26, 2019 - In the first half of 2019, average household electricity prices in the European Union increased slightly compared with the first half of 2018, while gas prices were stable, Eurostat said on Tuesday. In Croatia, the prices of both increased slightly.

In the first half of 2019, average household electricity prices in the EU stood at 21 euro per 100 kWh. Average gas prices stood at 6 euro per 100 kWh.

Taxes and levies accounted for 37% of the electricity bills. For gas bills, the corresponding share was 27%.

Between the first half of 2018 and the first half of 2019, the largest decreases in household electricity prices, in national currencies, were observed in Denmark (-4.3%) and Portugal (-4.1%), followed by Poland (-3.1%) and Greece (-1.3%).

The largest increase was registered in the Netherlands (+20.3%), ahead of Cyprus (+16.4%), Lithuania (+14.4%) and Czechia (+12%).

In Croatia, the household electricity price in the first half of 2019 was 13.21 euro per 100 kWh, up 0.8% on the year. Taxes and levies accounted for 22% of the electricity bills.

Between the first half of 2018 and the first half of 2019, the largest decreases in household gas prices, in national currencies, were observed in Denmark (-1.7%), Hungary (-1.6 %) and Austria (-1.3 %).

In Croatia, the average household gas price was €3.75% per 100 kWh, up 2% from the first half of 2018. Taxes and levies accounted for 20% of the gas bills.

More energy news can be found in the Business section.

Wednesday, 23 October 2019

INA Extracts 21 Billion Cubic Metres of Gas from Northern Adriatic

ZAGREB, October 23, 2019 - The INA oil and gas company on Wednesday marked the 20th anniversary of continued production of natural gas in the Adriatic Sea.

"In the last 20 years over 21 billion cubic metres of gas has been extracted by 18 platforms in the northern Adriatic. These figures encourage us to make further progress in the exploration and exploitation of hydrocarbons in Croatia, primarily in the northern Adriatic which offers the potential which I believe we will know how to use," Environment and Energy Minister Tomislav Ćorić said at a ceremony held on the Ivana A platform, located 36 kilometres from the nearest mainland.

Ćorić stressed that hydrocarbon exploration and exploitation was being conducted in line with the highest environmental protection and safety standards. "Successful projects like this testify to the importance of strategic and responsible management of resources with a view to developing the economy and increasing the share of domestic production."

Ćorić visited the platform in the company of INA CEO Sandor Fasimon and the head of the Agency for Hydrocarbons, Marijan Krpan.

Fasimon said: "The purpose of our oil and gas exploration and production activities is to maximise the existing potential domestically, both offshore and onshore. We have incorporated this into our development plans because 15 years from now we want to be proud of our company and remain a reliable partner to the Croatian economy."

Krpan said that the Northern Adriatic project was very demanding in terms of technology and concept and that it put Croatia among countries with the know-how for offshore hydrocarbon production.

Ćorić recalled that INA had begun hydrocarbon exploitation in the northern Adriatic in 1999 and that it was an excellent move. He said that currently 1.1 million cubic metres were extracted daily or about 400 million annually, which is about 15-20 percent of domestic consumption.

"In the last few years we have launched several campaigns for hydrocarbon exploration and exploitation, all of them onshore. The northern Adriatic offers certain potential and I'm sure we will know how to use it in the future," the minister said.

Asked about the LNG terminal, Ćorić said that it was being built and that it would be operational at the end of 2020. He noted that the LNG terminal would help meet Croatian needs for gas and diversify supply routes for Europe. "The exploitation of hydrocarbons is one way of reducing Croatia's energy dependence, the other being the construction of alternative infrastructure," Ćorić said.

More news about gas in Croatia can be found in the Business section.

Tuesday, 15 October 2019

Sufficient Gas Supplies Ready for Heating Season

ZAGREB, October 15, 2019 - There will be sufficient gas supplies for the coming heating season and the gas price will not change this season whereas in the near future it could fall markedly, it was said on Tuesday during a conference organised by the Croatian Gas Association (HSUP).

During HSUP's annual general assembly the association's president Dalibor Pudić said that there would be enough gas and end-users can expect secure supplies.

"We have never had a shortage of gas and it will be the same again this season. Suppliers' storage capacities are full. It is warm now, however, we cannot know what the weather will be like in one or two months' time even though that is an important fact so that suppliers can know how much gas to order," Pudić said and added that he did not expect the price of gas to change this season.

He underscored, however, that gas prices in future could change, that is go down.

"I expect that gas prices will change in the future and decrease considering the intensity of LNG production while the production of shale gas has decreased from the preceding period by 55% and so we expect that the expansion in the development of LNG gas will make prices significantly lower," added Pudić.

He claimed that over the past year the sale of LNG gas on European markets increased by 100 percent.

Assistant Environment and Energy Minister Domagoj Validžić explained that the LNG terminal being built on Krk Island should be up and running by the end of next year along with the completion of the gas pipeline.

"Gas will have an important role as a transition energy source toward completely clean energy," Validžić said.

More energy news can be found in the Business section.

Saturday, 28 September 2019

First Compressor Station in Gas Transport System in Operation by Year's End

ZAGREB, September 28, 2019 - The first compressor station in Croatia's gas transport system could be in trial operation as of October and in regular operation by the end of the year, it was said on Friday when Environmental Protection and Energy Minister Tomislav Ćorić and officials of the Plinacro gas pipeline operator visited the construction site at Velika Ludina in the Moslavina region.

Works on the 209.5 million kuna station, which will enable two-way gas transport between Croatia and Hungary from the start of 2020, began in August 2018.

Ćorić said it was especially important that the station would enable the normal operation of the future LNG terminal on Krk island.

"Although the lease of the terminal's capacity is lower than expected, a two-way route is necessary because one must consider the global situation in Europe, the ratio of LNG and natural gas prices, the ongoing negotiations at the European Commission's level, primarily the Russia-Ukraine gas transit. Alternative supply routes are increasingly topical, not just in Croatia but on the entire European continent," the minister said.

Plinacro CEO Ivica Arar said the construction of the first compressor station in Croatia's gas transport system was a strategic project which would also comply with European Commission criteria. He added that the construction of the Omišalj-Zlobin gas pipeline was likely to begin in January.

Asked by the press if the government planned to intervene if the prices of oil products continued to rise, Minister Ćorić said the government had intervention mechanisms for which there was no need yet.

Asked about the disposal of radioactive waste from the Krško nuclear power plant, which is co-owned by Croatia and Slovenia, he said it was necessary to wait for the outcome of a meeting with Slovenia due on Monday.

He said there was no agreement for now on a joint disposal site and that "Croatia is also ready for an alternative scenario."

More energy news can be found in the Business section.

Wednesday, 11 September 2019

Oil and Gas from Dinarides Would Reduce Energy Dependency

ZAGREB, September 11, 2019 - Minister of Environment and Energy Tomislav Ćorić said on Wednesday that he was satisfied with the interest shown in a tender for oil and gas exploration in the Dinarides and assessed that possible exploitation would reduce Croatia's energy dependency and fill the state and local budgets.

"This is proof that hydrocarbon exploitation in Croatia is continuing and that we have started what we communicated in the beginning - that in addition to creating an infrastructure or alternative supply route, we are increasing production in Croatia," Ćorić told reporters outside Government House with regard to the latest concluded tender for hydrocarbon exploration and exploitation in the Dinarides, which received one bid.

"For Croatia that primarily means that our energy dependency will be decreased. On the one hand, that is what we want, and on the other, in the context of future exploration, that means revenue for the local community as well as for Croatia overall, if in the second phase exploration proves to be commercial," said Ćorić.

He recalled information provided by the Vermillion energy company regarding commercial discoveries at two exploration sites which, according to Ćorić, means a significantly higher income for local communities in the form of an allowance per square kilometre but also for the state because the state, too, will receive its share of extracted hydrocarbon quantities.

The Croatian Hydrocarbon Agency (CHA) on Tuesday announced that it had received one bid in the latest tender to issue licences for exploration and exploitation of hydrocarbons in the area of the Dinarides. Unofficial sources have said that the sole bidder was the INA oil company.

In January this year the government decided to launch procurement procedures for the issuance of licences for exploration and exploitation in the Dinarides, covering an area of 12,134 square kilometres and consisting of four exploration fields in the areas of Karlovac, Lika-Senj, Primorje- Gorski Kotar, Zadar and Split-Dalmatia counties but not including national parks and the areas off the coast and along the border with Bosnia and Herzegovina. The exploration would be conducted for a period of five years.

More news about oil and gas exploration in Croatia can be found in the Business section.

Tuesday, 10 September 2019

One Bid Received for Gas and Oil Exploration in Dinarides

ZAGREB, September 10, 2019 - The Croatian Hydrocarbon Agency (CHA) has received one bid for a tender to issue licences for the exploration and exploitation of oil and gas in the area called Dinarides, the agency stated on Tuesday.

The call for bids was advertised on February 8 and closed at midday today and a deadline for licence issuance expires this December.

"We are satisfied because a bid has been made and this tender has ended successfully and we should not forget the fact that this is still an unexplored territory. We are also satisfied that all the tenders for onshore areas of Croatia have passed well," the agency told Hina after the bid was opened.

The agency will examine the bid to ensure that it meets all the tender requirements.

In January the government decided to launch procurement procedures for the issuance of licences for exploration and exploitation in the Dinaric Alps in an area of 12,134 square kilometres and for a period of five years. The bid excluded areas of national parks and off the coast and along the border with Bosnia and Herzegovina.

"In the area of the Dinarides, approximately 545.98 km of 2D seismic data has been recorded. Exploration of the area of Dinarides, encouraged by the appearance of petroleum outcrops and bituminous rocks, commenced in the 1950s. Comprehensive and significant geological mapping and geochemical research were performed for the purpose of evaluating hydrocarbon potential of the region," CHA said on its website when the call for bids was advertised.

The exploration in the Dinarides is aimed at reducing the fall in gas and oil production in Croatia, the government said then.

More news about oil and gas exploration in Croatia can be found in the Business section.

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