It’s a good time to import liquified natural gas (LNG), so it’s not surprising to see Croatia is looking to take advantage, entertaining bids this week for an LNG terminal on an island off its Adriatic coast. Reuters reports:
The project, with a nominal capacity of 6 billion cubic metres, is expected to require investment of around 600 million euros ($655.50 million).
LNG Croatia, a joint venture between power utility HEP and gas system operator Plinacro, said it had received four bids from industrial investors and three from financial investors for the project, which it aims to complete by mid-2019. […]
The Croatian government in July declared the project to be of strategic interest, which should simplify procedures for obtaining location and construction permits.
When Russia started making trouble in Ukraine two years back, policymakers across the continent suddenly seemed to recognize the problems associated with their heavy reliance on Russian gas imports. Many alit on LNG imports as a potential solution to their “Gazproblem,” but at the time we pointed out a wrinkle: LNG supplies go to the highest bidder, and Asia was paying a high premium for those hydrocarbons back then.
Now, it’s a very different story. The Asian premium has been all but erased, and a market already brimming with Qatari and Australian supplies is now starting to absorb U.S. shale gas. Prices are therefore coming down, enough to make LNG imports not just a strategically beneficial option for Europe, but perhaps an economically prudent one as well.
Lithuania got ahead of the game on these imports and is already funneling supplies through a floating LNG import terminal off its Baltic coastline. Now Croatia wants a piece of the action, and it isn’t hard to understand why. As the U.S. continues to beef up its LNG export infrastructure to help offload some of our natural gas glut on the global market, Europe is going to continue to build out its import infrastructure. That’s bad news for Putin.