Croatia-Hungary flows remain in limbo as TSOs negotiate

Croatia and Hungary are still negotiating over bidirectional flows of natural gas between the two countries, even as the development of the proposed Croatian LNG terminal at Krk could boost demand for Croatian flows to Hungary.

Gas can already flow from Hungary to Croatia, but the implementation of reverse flows has been delayed by a lack of suitable infrastructure in Croatia.

Croatian transmission system operator (TSO) Plinacro has started to build new compressor stations which would enable it to flow gas to Hungary by the end of 2017 and to Slovenia by the end of 2018.

However, Hungarian TSO FGSZ has proposed a pressure management agreement as a temporary solution, whereby FGSZ’s existing compressor station is used to manage pressure at the border.

“The Hungarian high pressure natural gas system [has been] built and is ready for bidirectional deliveries,” a spokeswoman for FGSZ told ICIS. “FGSZ’s proposal is under negotiation with Plinacro.”

The spokeswoman did not give any time frame for these negotiations, which have been ongoing since last summer.

Plinacro could not be reached for comment.

LNG deliveries could begin earlier

The Croatian government has returned to the idea of using a floating LNG terminal in order to speed up construction and lower costs of the import project, in said at the beginning of March.

Seven potential investors have expressed interest in funding the proposed terminal, LNG Croatia announced in January, and a final investment decision is expected no later than September. Commercial operation was originally scheduled to begin in the fourth quarter of 2019, but a floating terminal could be constructed in two years, bringing commercial operation forward to 2018.

This would give Plinacro more incentive to facilitate bidirectional flows in order to export gas from the LNG terminal into Hungary. FGSZ expects Plinacro to have developed its infrastructure before the LNG terminal becomes operational.

“By the time of completion of the Krk LNG terminal, the Plinacro pipeline system should be developed according to the eventual capacity demand,” the FGSZ spokeswoman said. “This should enable Plinacro’s system for bidirectional deliveries without any additional pressure management service.” julie.fisher@icis.com