The European Commission (EC) has found the Croatian government’s plan to support the construction and operation of an LNG terminal at Krk island with a grant of €100m to be in line with EU State aid rules.
The funding, announced in February, is in addition to a €101.4 EC Connecting Europe Facility (CEF) grant and €32.2m to be provided by the shareholders of LNG Croatia LLC. The total investment costs to build the terminal amount to €233.6m.
Commissioner Margrethe Vestager, in charge of competition policy, said: "The new LNG terminal in Croatia will increase the security of energy supply and enhance competition, for the benefit of citizens in the region. We have approved the support measures to be granted by Croatia because they are limited to what is necessary to make the project happen and in line with our State aid rules."
The funding will support the construction and operation of a floating LNG terminal, consisting of a floating storage and regasification unit (FSRU) and the connections to the national gas transmission network. The LNG terminal is designed to transport up to 2.6bn cubic meters per year (bcm/y) of natural gas into Croatia national transmission network from 2021.
In addition, the EC Croatia will grant a tariff compensation called ‘security of supply fee', which is financed by levies charged by the gas transmission system operator to gas users along with gas transmission tariffs, in case revenues from the terminal fees are not sufficient to cover operating expenses.
The Connecting Europe Facility is centrally managed by the European Commission, through the Innovation and Networks Executive Agency (INEA).
