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Croatia: ‘Ionian Adriatic Pipeline is top priority’

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ATHENS – The Ionian Adriatic Pipeline (IAP) is a top priority among all the regional pipeline projects for Croatia, the country’s deputy economy minister told New Europe.

Speaking on the sidelines of the 2nd Annual Balkans Oil & Gas 2013 Summit in Athens on 24 September, Alen Leveric said Croatia hopes to get Caspian gas from the Trans Adriatic Pipeline (TAP). “We’re now discussing the project of IAP as the first stage of TAP. That means the time TAP is finished, IAP is finished so this is the other way to support Europe by getting gas from the Caspian,” he said, adding that this would boost the European Union’s diversification efforts. Croatia joined the EU as their 28th member state on 1 July.

On 26 September in Croatia, the energy ministers of Croatia, Albania, Bosnia-Herzegovina, and Montenegro reportedly agreed the next steps in the IAP project. A feasibility study will be completed and a business model proposed by the next ministerial meeting in Tirana in the first quarter of 2014, which will also be attended by partners and investors. Ministers confirmed their governments’ commitment to the construction of the IAP, which would open new energy prospects for Albania, Bosnia and Montenegro as well as help Croatia in its goal to become a regional energy hub. TAP CEO Kjetil Tungland praised the IAP project.

IAP envisages linking the gas pipelines of Croatia via Montenegro to the TAP in Albania. The IAP section from Split, Croatia to Feri, Albania will be 516 kilometers long and have an annual capacity of five billion cubic metres. Croatia’s IAP section, from Dugopolje to the Montenegrin border, is 250 kilometres long.

Earlier in Athens, Leveric told New Europe that IAP would strengthen the security of supply and offer Croatian consumers lower gas prices. He said diversification is not about just the security of supply. “It’s about the price. If there is lots of gas supply we have a lower price. Now you have LNG [liquefied natural gas], you have these corridors which will finish in a few years, you have new fields in Cyprus, in the Adriatic Sea, that means the price of the gas will be lower and that means the industry will be stronger,” he said.

Seismic data company, Spectrum, whose representatives were present in Athens, was recently awarded a license by Croatia to conduct a preparatory seismic survey. Leveric said gas extraction will boost Croatia’s energy independence. Currently, Croatia is importing half of its gas energy needs from Russia, and the other half from Croatian oil and gas company INA which extracts gas from the North Adriatic Sea.

On 12 September, representatives from Russian gas monopoly Gazprom led by general Director Alexander Medvedev met with officials from Croatia to discuss the South Stream project’s implementation in the Balkan country. In March, 2010, Russia and Croatia signed the Intergovernmental Agreement, stipulating that Croatia would join South Stream. In November, 2011, a national Feasibility Study was signed. In order to implement the South Stream project in Croatia, Gazprom and the authorised Croatian company Plinacro are in the process of setting up a joint project company and developing design documents for the branch pipeline.

Leveric noted that Croatia “is just a branch” of South Stream since the Russian-backed pipeline is not transiting the country. He added that Croatia implemented the EU’s Third Energy Package and therefore will comply with all EU directives. He said Croatia is making full use of the Energy Package and finished it before it entered the EU. “That sends a strong message that we are part of Europe,” he said.

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

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