Bosnia: TAP instead of South Stream for security of gas supply, fierce competition of lobbies

Published on 23. December 2014., SEE Energy News

Having buried the Russian energy project South Stream, actions of alternative TAP pipeline grew, by which the market of Bosnia and Herzegovina and Southeastern Europe would be supplied with the gas from Azerbaijan.

After the collapse of the energy project “South Stream”, action of the alternative project called Trans Adriatic Pipeline (TAP), in whose implementation also BiH is officially incorporated from December 2013th, have further risen. TAP would be built in the case of “South Stream” success but it is set now as the absolute energy priority of the European Union, but even more of the countries in the region through which the pipeline “South Stream”should have pass. This is clearly stated at a meeting in Brussels earlier this week, where the European Energy Commissioner Sefcovic brought together colleagues from Austria, Slovenia, Bulgaria, Italy and Romania, and showed them an alternative plan of supplying gas markets of Southeast Europe through the so-called “Southern Energy Corridor” and whose framework just makes gas corridor TAP.

Gas Corridor TAP is adjacent to the large energy corridor TANAP (Trans Anadolian Pipeline) over which the gas would be supplied from Azerbaijan to Turkey and from there via Greece and Albania, across the bottom of the Adriatic Sea to Italy and the markets of Western Europe. One branch of this pipeline in Albania would be separated for the Balkan – would be extended to Albania, via Montenegro and Croatia to BiH. It is important to emphasize that the connecting point of Croatia and BiH is in Ploce, what raises the possibility that this pipeline distributes gas from LNG terminals which Croatia intends to build in Ploce.

A few months ago on the website Slobodna Bosna, it was published the correspondence between the Canadian firm Gryphon Capital Development Corporation with the Ministry of Energy of the BiHFederation about five billion dollars’ investment in the construction of a terminal for liquefied natural gas storage in Ploce and the construction of a gas pipeline from Ploce to Mostar, Sarajevo, Tuzla, Brcko and further towards the countries of Central Europe.

Also the Croatian Government and the Government of the BiH Federation were informed on the intention for investment, and potential Canadian investors have already met with Croatian Minister of Economy Ivan Vrdoljak and twice visited Sarajevo and talked with representatives of the FBiHGovernment, confirmed for “Slobodna Bosna” Minister Erdal Trhulj.

In addition to LNG terminal in Ploce and gas pipelines through BiH, Canadians are also interested in the construction of two gas power plants – in Zenica and Sarajevo, which would produce electricity and heat energy for heating flats and commercial premises.

Canadian investors are interested in the Port of Ploce because their plan is orientation to the market of Southeast Europe, which is not yet saturated and it has growth potential in the future. They claim that their gas was approximately thirty percent cheaper than the Russian. LNG terminals in Poland and Rotterdam are focused on Western Europe, those in France and Italy, southern Europe, and Southeast Europe and Central Europe is not still sufficiently covered.

That is why there is interest, although such investment does not exclude gas trading away from the area.

Apparently in the Croatian Government offered LNG terminal in Omisaljto the Canadians, for which they are also open, but because of good knowledge of the port location, they decided for this destination. Specifically, for the construction of an LNG terminal on the Krk, the Croatian Government has counted on Qatar for long time.

However, the Croatian Minister of Economy Ivan Vrdoljak said even last year that people from Qatar want to be the main gas suppliers, but they do not want their money to participate in the investment. Therefore, the Croatian Government still look for an investor who will participate in the construction of the terminal on the Krk, and few American companies are mentioned as potential investors.

Trans Adriatic Pipeline (TAP) for the whole Bosnia and Herzegovina, including Republika Srpska, there is much greater economic and energy significance than the collapsed gas corridor South Stream. Namely, the main route of Russian gas pipeline “South Stream” is projected through Serbia, and one branch of this pipeline is directed to Republika Srpska, which is not defined in this project as a transit area but as an end gas user.