Integrated oil and gas firm Total has announced the formation of a new company, Adria LNG, to study the construction of a LNG degasification terminal on the Croatian coast.

The terminal will be located on the Croatian island of Krk in the northern Adriatic, well positioned to access the European gas market and to receive liquefied natural gas (LNG) supply from a variety of sources.

Total holds 25.58% in Adria LNG and is associated with E.ON Ruhrgas (31.15%), OMV (25.58%), RWE (16.69%) and Geoplin (1%).

The new terminal will have an initial capacity of 10bcm per annum that could be increased to 15bcm per annum. Final investment decision for the project is expected by the end of 2008 and first operation of the LNG receiving terminal in 2012.