Croatia: Hungarian Electicity Works leased large capacity of future LNG terminal on the Krk island

, SEE Energy News

The operator of the future terminal LNG Hrvatska said that in the gas year 2020/2021, which lasts from 1 January to 30 September 2020, MFGK Croatia leased a capacity of 666 million cubic meters and 1.014 billion cubic meters of annual capacity in the following six years. MFGK Croatia, local company owned by Hungarian Electricity Works (MVM), has leased 6.75 billion cubic meters of capacity of the future liquefied natural gas (LNG) terminal on the Croatian Krk island.

Thus, the average lease rate of terminal’s capacity, half a year before its planned commissioning, increased to almost two billion cubic meters, from a total of 2.6 billion cubic meters, after INA and HEP previously leased slightly more than 0.5 billion cubic meters. MET Croatia Energy Trade also leased 0.5 billion cubic meters of capacity for three years.

With the lease of two billion cubic meters per year, the need to collect the so-called SOS fee, namely the fee for security of supply, which in the case of a lease of less than 1.1 billion cubic meters per year would be paid by all gas consumers in Croatia, was definitely eliminated.

Last February, Croatian Government adopted a decision on the financing of the first phase of the project for the construction of LNG terminal on the island of Krk. For this purpose, the European Commission (EC) has approved 101.4 million euros in grants, while the state will provide additional 100 million euros from the budget. Up to 50 million euros will be provided during this year or by January 2020 at the latest, while the remaining 50 million will be provided by the end of 2020. These funds will be used for the purchase of a Floating Storage and Regasification Unit (FSRU) vessel and the construction of auxiliary facilities and a high-pressure pipeline. The remaining 32.6 million euros will be secured by state-owned power utility HEP and natural gas transmission system operator Plinacro, which should be provided by the end of February. It is expected that the LNG terminal will be put in operation on 1 January 2021. Total capacity of the FSRU will be 2.6 billion cubic meters.