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The Commission approved state aid for the expansion of the LNG terminal on Krk

by AI | 07.May 2024 | Europe in brief AI

Croatia significantly increases the capacity of the floating LNG terminal on the island of Krk from 2.9 to 6.1 billion cubic meters of gas annually. From the summer of next year, Croatia becomes an important energy hub for Central and Southeastern Europe.

BRUSSELS – On Monday, the European Commission approved Croatian state aid for the expansion of the liquefied natural gas terminal on Krk in the amount of 25 million euros.

 The Commission states that in accordance with EU state aid rules, it has approved the Croatian measure of 25 million euros to support the expansion of the liquefied natural gas (LNG) terminal on the island of Krk. The measure will be partially financed by the Recovery and Resilience Facility, following the Commission’s positive assessment of the amended Croatian plan for recovery and resilience.

  This measure will finance the installation of an additional regasification module with a capacity of 250,000 m³/h at the existing LNG terminal on Krk. This will achieve a new maximum regasification capacity of 700,000 cubic meters per hour, corresponding to 6.1 billion cubic meters annually. The support will be in the form of direct grants, covering part of the investment costs, to the company LNG Croatia, the holder and operator of the terminal.

The Commission assessed the measure in accordance with EU state aid rules, which allow member states to support the development of certain economic activities under certain conditions in accordance with the Guidelines on state aid for climate, environmental protection, and energy from 2022.

The Commission found that the measure was necessary and appropriate to enable the beneficiary to implement the project. The Commission also considered that the project was necessary to ensure the gas supply for Croatia and the Southeast Europe region, while simultaneously contributing to the diversification of energy supply and ending dependence on Russian fossil fuels in accordance with the REPowerEU plan.

The Commission concluded that the measure was proportional as it was limited to the necessary minimum and that its positive effects outweigh any possible negative effects on market competition and trade within the EU. Based on this, the Commission approved the Croatian measure in accordance with EU state aid rules.

 In August 2022, the Croatian government made a decision to build the Zlobin – Bosiljevo gas pipeline and to increase the capacity of the LNG terminal on Krk from the current 2.9 to 6.1 billion cubic meters of gas annually.

With the new pipelines and the expansion and increase in the capacity of the LNG terminal on the island of Krk, which began operating in January 2021, Croatia becomes a regional energy center for central and Southeast Europe.

Representatives of the company LNG Croatia, which manages the terminal, signed a contract in April last year for the delivery of an additional regasification module with the Norwegian company Wartsila Gas Solutions. The Norwegians have committed to deliver the module within 22 months, so its installation in the existing floating terminal can be expected in the summer of next year. (May 6, 2024.)