LNG Hrvatska has reportedly received just one binding offer to lease capacity at the planned planned liquefied natural gas (LNG) terminal on the Croatian island of Krk, unnamed sources told jutarnji.hr on April 14.

The alleged lack of interest questions the financial viability of one of the largest infrastructure projects planned by the Adriatic country. 

Krk LNG terminal is supposed to play an important role in the diversification of natural gas supply as well as ensuring security of natural gas supply for Central and Southeast Europe - it is part of Croatia's plans to become an energy hub for the region. However, the launch of the construction process has been delayed several times. 

The LNG terminal will initially operate as an offshore floating storage and regasification unit with a yearly capacity of at least 2bn cubic metres (cm).

However, sources claim that in the first round of tenders for the submission of binding offers, which has already expired, LNG Hrvatska has received just one bid, from Croatian oil and gas group INA, for only 100mn cm of natural gas per year.

“This was the first round and we have always known that we will need more time to fill the capacity. Indeed, the result is disappointing as we expected at least 1bn cubic metres in the first stage. The tender will have three rounds, everything must be concluded by the end of May and it is obvious that the state will have to get involved,” a source told daily jutarnji.hr.

The project was developed from 2014 until the middle of 2016 as an on-shore LNG terminal solution. In June 2016, the Croatian government decided to speed up the implementation of the project, opting for a two-stage implementation. The first phase includes the construction of a floating terminal for storing and regasification of natural liquefied gas on Krk, to be followed by the construction of an onshore terminal. The Croatian government declared all stages of the construction of the planned LNG terminal on the island of Krk of strategic importance on February 1.

In December 2016, the EU announced it will invest €101.4mn in the construction of the LNG terminal. The grant contributes to the overall estimated costs of €383.6mn.