Croatia makes the biggest progress
Plinacro owns 2,600 kilometers of a gas pipeline network, as well as an LNG terminal on Krk and an underground gas storage facility, so the infrastructure is complete, said Marin Zovko, a member of the management of Plinacro
– However, not so long ago, in 2002, Croatia only had gas in the northern part, where production was carried out at gas fields. A year later, in 2003, the first Gasification Strategy was prepared and the realization of the whole thing started, which took 11 years. Around EUR 600 million was invested in the construction of a new gas network. Then we bought an underground gas storage from INA, and in the past few years, we’ve also gotten LNG on Krk – Zovko said.
The aim was to diversify the supply directions, Zovko says, so that all Croatia has good energy. It has turned out to be justified that we’ve invested in a country-wide network, he said.
– We continue to work on new development project, connecting with the Adriatic-Ionian gas pipeline, where the idea is for the Croatian system to be connected with TAP, with the gas pipeline from the Southern Gas Corridor, whereby we would have an additional diversification and supply security, not just us, but all the countries on that route. We are also considering other projects which concern connecting with the neighbors, with Serbia and BiH, to create a good network and enable good supply directions for all countries.
In light of the world events, the project on Krk, Zovko says, has turned out to be extremely good, because it provides security, not just to Croatia, but the entire region.
– Croatia now has around 25% of its own production, however, what’s missing is the remaining 75% to meet its own needs. Not having the infrastructure and not diversifying the sources in one’s own portfolio is the most expensive option, because energy prices are jumping. The tariff which enables the diversification of the infrastructure is considerably lower compared to the price we see in the market now.What are Montenegro’s plans?
Montenegro is aware that, if it wants to strengthen its energy sector, it needs to turn to gas as well, as a stable energy source, said Marko Perunovic, the state secretary for energy in Montenegro
– We need to have gas, that’s clear, and we are aware that we need to do the diversification of the routes. We have an option through TAP, and also the Adriatic-Ionian gas pipeline, but I believe that we have to work together on it all. As Montenegro, we need to have clear needs for gas in order to apply at the partners in Azerbaijan.
At the beginning of the summer, the second phase of the exploration of the Montenegrin sea area and the search for natural gas should start. An annex to the agreement was adopted recently whereby the Greek company Energean was given another four months to present a new partner with which it would enter the project of additional boring and exploration of gas.
Elektroprivreda Crne Gore plans to build the first gas energy facilities in Montenegro, so they have published the public invitation for the preparation of the Study for the Development of Technical Solutions and the Prior Feasibility Study for Gas Power Plants. The feasibility study pertains to potential gas power plants in three locations, namely, a hybrid power plant based on a gas turbine a minimum power of 50 MWe near the Port of Bar, with potential renewable sources, a combined gas power plant of a minimum power of 150 MWe within KAP, combined with potential renewable sources and a gas power plant of up to 200 MWe in Pljevlja.
The proposed concepts of power plants aim to enable a long-term use of local resources in a period of a minimum of 25 years and in full harmonization with the climate rules and regulations of the EU.
– In line with the expected estimates, we hope that we could supply ourselves from those three fields in the next 20, 30 years… Whether it will come true or not will be seen through the exploration period in the next year – Perunovic said.From the angle of traders
While gas traders in the West are focusing on operating efficiency, introducing algorithms and blockchain and automizing their processes, the Western Balkans is very late and the gas market is not fully liberalized, said Milan Terzic of the company MET SR
B, a part of the Swiss MET Holding, a gas trader.
– That means that the regulatory framework is not harmonized with the Third Energy Package, and where it is harmonized, it is not fully implemented. In practice, this means that we have a limited access to transport capacities, a non-implementation of the virtual point, where traders could exchange natural gas, a SPOT market does not exist and the separation of the operator of the system and the supplier has not been completed, and the data on cross-border gas flows, which are otherwise published on power exchanges, are not showing. Not all this applies to all countries of the Western Balkans, but it does to some.
The consequences, Terzic says, is that, on the side of the supply, we have a dominant supplier, which, having no competition, has not motivation to adjust the prices either, and the lack of competition means fewer diversified supply routes, so traders are forced to look for new sources. In such situations, consumers don’t have much choice either.
– The situation in the SPOT markets is not the best, the prices were jumping dramatically in the midst of the war in Ukraine, so, on March 7, the price went up to as much as USD 3,000 per cubic meter. We will all probably pay that price, not directly through gas price increases, but through the inflation. The public suppliers will incur debts in order to finance the gap between the consumers and the suppliers. A liberalization would adjust the market prices.
If there’s no liberalization, Terzic believes, there’s no motivation to invest in a country which has no liberalized market either, because investors cannot count on a free choice of suppliers.
– The opening of the natural gas market is a bitter pill that everyone has to swallow, and the sooner we digest this, the better it will be for us, and the markets will reach a more mature phase sooner. Then both the traders and the consumers will benefit from the opening – Terzic said.
Let us remind that the 2022 Trebinje Energy Summit was held between March 16 and 18, organized by Elektroprivreda RS, the City of Trebinje and the company SET
.The eKapija portal was the media sponsor of the Summit.
You can read about the participants and the topics of the Summit HERE