Croatia has ambitions to become a gateway for energy and trade in Europe, using its position on the Adriatic to link global markets with Central Europe. But as the small country ramps up investments in new gas pipelines, and the modernisation of its largest port, questions remain about how far these ambitions can realistically go in an increasingly crowded field.

An important step was the opening of the liquefied natural gas (LNG) terminal on the island of Krk, a floating facility in Omišalj that began operations in 2021. The government is expanding its capacity from 3.1 to 6.1bn cubic metres of gas per year to position the country as a regional energy hub, as Europe seeks to diversify away from Russian supplies. 

Since its launch, the terminal has offloaded LNG from 108 ships, mostly from the US, but also from Algeria, Egypt and Trinidad and Tobago, covering Croatia’s entire annual consumption, which has fallen to around 2.59 bcm, and allowing for exports.

The upcoming upgrades will enable Croatia to supply gas to neighbouring countries, including Hungary, Slovenia, Austria, Germany’s Bavaria and potentially Bosnia & Herzegovina.

"This terminal makes Croatia, when it comes to gas, an energy regional hub," Plenković in June 2024, announcing the terminal’s expansion. 

Officials in Zagreb highlighted the importance of Krk in January when Russian gas exports via Ukraine were halted, leaving many countries scrambling for alternatives. Croatia, meanwhile, reported stable supplies, drawing from its LNG terminal, as well as domestic production and underground storage at PSP Okoli, which was at 60% capacity.

“Thanks to the strategic role of the LNG terminal on Krk, Croatia has not been dependent on Russian gas since the terminal began operations,” the economy ministry said at the time as quoted by Croatian news agency Hina.

Disruptions did not only come from the Russia-Ukraine war. Krk was also important during a period of unusually hot weather in summer 2024. S&P Global reported in July 2024 that during heatwaves in the East Mediterranean, Croatia came to the fore as a "premium hub" for LNG deliveries to Europe. During the month, Croatia’s LNG imports reached 206,000 tonnes, the highest of any July since the terminal opened in 2021.

New pipelines planned

Construction of pipeline infrastructure is underway. In March, a ceremony marked the completion of works on the Zlobin-Bosiljevo gas pipeline and the start of works on the Lučko-Zabok gas pipeline, both financed with Recovery and Resilience Facility funds as part of the broader LNG terminal project, as announced by pipeline company Plinacro. 

Two months earlier, the government announced €534mn of investment in four new pipelines to strengthen gas transport links to Hungary and Slovenia and, eventually, Ukraine. The pipelines will support the expanded capacity of the LNG terminal, allowing Croatia to channel LNG deeper into Central and Southeastern Europe.

The projects, managed by state-owned Plinacro and supported by EU recovery funds, will stretch 216 km and are designed to handle hydrogen transport in the future. The projects consist of a main gas pipeline system on the route Omišalj-Zlobin, Zlobin-Bosiljevo-Sisak-Kozarac and Kozarac-Slobodnica, and an interconnection gas pipeline system with neighbouring Slovenia on the Lučko-Zabok-Rogatec route.

"The construction of four gas pipelines with a total length of 216 km will position Croatia as a regional energy hub and ensure its energy independence and continuity and security of natural gas supply to households and businesses in the territory of the Republic of Croatia and other European Union members," said Minister of Economy Ante Šušnjar as quoted in a government statement.

The Rijeka gateway

Croatia’s ambitions to become a regional hub are not limited to energy. The port of Rijeka, the country’s largest cargo port, is undergoing a transformation with the construction of the €380mn Rijeka Gateway container terminal. The facility, a joint venture between APM Terminals, part of A.P. Moller-Maersk, and Croatia’s ENNA Group, is expected to begin operations later this year and aims to position Rijeka as the premier entry point for goods heading into Central Europe.

“Rijeka Gateway will be the most modern, remote-controlled container terminal in this part of Europe,” Koen Benders, CEO of Rijeka Gateway, said at the project’s announcement in 2023. The terminal will feature electric cranes and a 20-metre quay depth, allowing it to handle the world’s largest container vessels.

The terminal plans to process 650,000 TEU annually in its first phase, with the potential to exceed 1mn TEU in later phases. With a 50-year concession, the project is seen as a strategic investment that could generate up to €200mn in annual fiscal contributions to the state after 2030.

Logistics giant Maersk, one of the terminal’s future customers, sees the project as a way to reduce transit times to Adriatic and Central European markets. “Once completed, Rijeka Gateway will open a new logistics chapter for Croatia and the region,” Aymeric Chandavoine, president Europe at A.P. Moller-Maersk, said in 2023.

Despite the optimism, challenges remain. Rijeka’s existing rail connectivity, essential for moving goods inland, is constrained by a single-track railway that runs through the city. Efforts to build a second track have been hampered by high costs and potential disruptions to port operations.

A study supported by JASPERS, the EU’s infrastructure advisory service, suggested relocating some of Rijeka’s port functions to Krk to ease congestion and free up urban space, while using Zagreb as Croatia’s main freight distribution hub. The strategy could improve efficiency and provide a boost to Croatia’s reindustrialisation plans.

Zagreb hopes to gain a further boost from its membership of the regional Three Seas Initiative, which includes countries between the Baltic Sea, Adriatic Sea and Black Sea. Croatia plans to focus on boosting economic, energy and infrastructure cooperation as it assumes the rotating presidency of the Three Seas Initiative, announced Plenković in April. 

Routes to Asia 

Rijeka’s position on one of the trade routes from China to Central Europe stimulated Chinese interest in the port’s revamp, but a Chinese bid was rejected reportedly after pressure from EU and US officials – the smaller port of Luka Zadar is, however, majority-owned by the Chinese company Luxury Real Estate

As well as trade shipments from China to Europe, Croatia is keen to be part of the India-Middle East-Europe Economic Corridor (IMEC), India’s alternative to China’s Belt and Road Initiative (BRI), which was discussed during Indian Prime Minister Narendra Modi’s visit to Croatia in June. 

The visit aligned with Croatia’s ambition to act as a “Mediterranean gateway” to Central Europe, but a comment from the Centre for Eastern Studies (OSW) notes this will face “existing infrastructure limitations, regional competition, and political instability in the Middle East”. “Italy and Slovenia remain strong competitors in the race to serve the markets of the Three Seas Initiative and to connect with the IMEC corridor. Both countries boast larger and better-connected ports in Trieste and Koper,” the comment said. 

There are also issues on the other side, as the think-tank points out, “no roadmap for the project has yet been developed, nor has funding been secured”, with regional tensions a further issue. 

While Croatia’s geographical position gives it a natural advantage to link Europe with the Middle East and Asia, it faces competition from other Adriatic ports and established European hubs vying for the same transit business. Rijeka is one of several ports in the northern Adriatic, which is also home to several other ports. 

“The Croatian authorities aim to transform the port of Rijeka into a logistics hub. It competes in this domain with Slovenia’s Koper and Italy’s Trieste,” wrote OSW analysts. “[Croatia is] also seeking to rival other Mediterranean countries, such as Greece (Piraeus) and France (Marseille). This ambition is supported by the planned opening in September of the new Rijeka Gateway container terminal, which will be the most technologically advanced facility of its kind on the Adriatic.” 

However, the comment continued, “Obstacles to the realisation of Zagreb’s ambitions may include infrastructure limitations and regional competition. The full utilisation of the Rijeka Gateway terminal’s planned handling capacity will be hampered by the current state of transport infrastructure, particularly the railway network.” 

As OSW analysts pointed out, expansion and modernisation of the railway line from Rijeka via the Croatian capital Zagreb to the Hungarian border is crucial, but is not expected to conclude until 2032. 

Croatia’s push to become a European energy and transport hub has gained momentum with the expansion of its LNG terminal and the overhaul of its main port. But realising these ambitions will require further infrastructure investments and overcoming competition from better-connected neighbours, leaving Croatia’s aspirations as a potential hub still a work in progress.