The Commission says Croatia’s support for the Krk LNG terminal is in line with EU State aid rules and the project will help diversify energy supplies


Image: The new LNG project in Croatia is being developed by LNG Croatia. Photo courtesy of Carlo San/

The European Commission has approved Croatia’s plans to support construction of the €233.6m (£213m) LNG terminal at Krk Island.

European Union antitrust regulators approved the Country’s plans to support the project, saying it would diversify gas supply sources and increase security supplies.

It also said the project would help diversify energy supplies without affecting competition.

European Commissioner for Competition Margrethe Vestager said: “The new LNG terminal in Croatia will increase the security of energy supply and enhance competition, for the benefit of citizens in the region.

“We have approved the support measures to be granted by Croatia because they are limited to what is necessary to make the project happen and in line with our State aid rules.”

Croatia to make £91m in direct financing for the LNG terminal

The Croatian government plans to make €100m (£91m) in a direct financial contribution for the development of the terminal, which will include floating storage and regasification units, as well as connections to the natural gas network.

Scheduled to be commissioned in 2021, the terminal will have capacity to transport up to 2.6 billion cubic meters per year (bcm/y) of natural gas into the country’s national transmission network.

The Commission said: “In addition, Croatia will grant a tariff compensation called ‘security of supply fee’, which is financed by levies charged by the gas transmission system operator to gas users along with gas transmission tariffs, in case revenues from the terminal fees are not sufficient to cover operating expenses.”

The project will receive €32.2m (£29.2m) in direct equity from the LNG terminal company shareholders as well as €101.4m (£92.5m) from the Connecting Europe Facility, which is managed by the European Commission through the Innovation and Networks Executive Agency (INEA).

The LNG project is being developed by LNG Croatia, which is 85% owned by the Croatian state-owned gas and electricity utility Hrvatska Elektroprivreda. Plinacro, the national gas transmission system operator, holds the remaining 15%.

In April 2019, the European Commission approved a €385m scheme, under EU State aid rules, to support electricity generation from renewable energy sources in Lithuania.

The approval is applicable for all types of renewable generation and is expected to contribute to the EU environmental objectives without unduly altering competition.