The Croatian Government has instructed state-owned utility HEP to purchase at least 1.1 billion kWh of natural gas, equivalent to approximately 1.1 TWh, after commercial market participants failed to refill the country’s underground storage system quickly enough for the 2026–27 heating season.
The intervention follows a government review of injection rates at the Okoli underground gas storage facility. The assessment found that the plans submitted by storage users would not produce sufficient inventories before winter.
Okoli was only 50.4% full, compared with 67.7% during the corresponding period of 2025. The weakness was part of a broader European trend, with average EU storage levels at 53.4%, down from 65.3% a year earlier.
The government attributed the slower injections largely to high wholesale prices. Gas futures were trading around €60–63/MWh, encouraging some suppliers to delay purchases in the expectation that prices might decline before the end of the injection season.
That strategy may be commercially rational for an individual trader but creates a collective security risk. Each supplier has an incentive to wait for cheaper gas, yet widespread delay can leave the system unable to reach the required storage level before winter demand begins.
HEP was selected to execute the procurement because its subsidiary, HEP-Plin, is being designated supplier of last resort through a regulatory process managed by the Croatian Energy Regulatory Agency. The role places the state-owned group at the centre of the country’s emergency supply arrangements.
Croatia has established a near-term objective of filling Okoli to at least 80% by the beginning of October. European rules generally target storage levels of 90% by 1 October, although limited flexibility permits inventories to remain no lower than 80% during the October-to-December period.
Before adopting the measure, the government consulted companies holding storage rights at Okoli. Users with unused allocations agreed to make capacity available voluntarily, allowing HEP-Plin to lease additional space beyond its existing entitlement. The companies involved were not disclosed because their storage positions are commercially sensitive.
The procurement effectively transfers part of the timing and price risk from private suppliers to the state-owned utility. HEP must decide whether to purchase promptly at elevated prices or stage acquisitions in the hope that the market softens without compromising the injection schedule.
The cost implications will depend on the final purchasing strategy and the treatment of the gas after storage. At €60/MWh, a 1.1 TWh purchase would carry a wholesale commodity value of roughly €66 million, before transport, storage, financing and balancing expenses. Even a relatively small price movement can therefore materially affect the cost ultimately borne by HEP, consumers or the state.
Krk LNG is likely to provide a large share of the physical supply. Around 70% of the gas entering Croatia’s transmission system already arrives through the terminal, whose commercial capacity is fully booked for more than a decade.
The intervention highlights the conflict between market optimisation and security-of-supply obligations. Storage holders may prefer to wait for better prices, but governments cannot rely entirely on speculative purchasing behaviour when winter adequacy is at stake. Croatia has chosen to use HEP’s balance sheet to close that gap.
