Cookies on the ICIS website


Our website uses cookies, which are small text files that are widely used in order to make websites work more effectively. To continue using our website and consent to the use of cookies, click away from this box or click 'Close'

Find out about our cookies and how to change them

Adria LNG slips to 2017 on European “gas surplus”

28 May 2010 13:23:07


Adria LNG has delayed a decision on its proposed 10 billion cubic metre (Gm3)/year LNG terminal in Krk Island, Croatia, to 2013.

The deadline for final investment decision (FID) has slipped from 2011 to 2013, with a view to receive first LNG in 2017, a spokesman for E.ON Ruhrgas, the main shareholder of the Adria consortium, said on Tuesday.

"The project timetable has to be adjusted because of the existing market situation with a gas surplus in Europe. E.ON Ruhrgas is therefore not able to take a Final Investment Decision until 2013. An earlier decision is not possible, given the current forecasts for gas demand in Europe," the spokesman said.

E.ON Ruhrgas owns a 39.17% stake in the project. The remaining shareholders are OMV (32.47%), Total (27.36%) and Slovenia's Geoplin (1%). E.ON's fellow German utility RWE left the consortium last year.

Adria LNG filed its application for a location permit with the Croatian Ministry of Environment on 21 May, apparently later than planned. Both E.ON and the consortium said they expect to obtain approval by the end of the year.

"No connection" with TAP pipeline decision

E.ON Ruhrgas acquired a 15% stake last week in the 10-20Gm3/year Trans Adriatic Pipeline Project (TAP), which is being developed by Switzerland's EGL and Norway's Statoil. The pipeline would supply the south of Italy and Albania with gas sourced from Azerbaijan and other potential gas producers.

The E.ON spokesman denied the delay on the Adria LNG project was related to a shift towards the TAP pipeline.

"I do not see competition between the two projects," he said. "Adria LNG intends to supply customers throughout Europe, and particularly in Croatia, Slovenia, Central Europe and Italy. TAP is designed to supply Italy, where we have a 4-6Gm3/year portfolio."

New partners in the wings

Adria expects to start negotiations with new partners in the fourth quarter. "We expect to reach agreement on the framework of our negotiations ahead of the summer break in order to start formal negotiations after," the consortium's spokesperson said.

Three Croatian companies have expressed interest in joining the project and sharing between them an equity stake of up to 25%.

Croatia's gas transmission system operator Plinacro and state power utility HEP earlier this year submitted a joint letter of intent on obtaining a combined 11% interest in the project via LNG Hrvatska.

Croatian oil and gas company INA also sent a letter of intent earlier this year on securing a 14% stake, which is conditional on successful completion of due diligence.

Other Options