Croatia becomes a Strategic LNG Hub in Southeast Europe

Faced with growing demand in the Eastern Mediterranean, Croatia is establishing itself as an essential hub for liquefied natural gas (LNG) in Europe, surpassing capacity in North-Western Europe.

Share:

Essor LNG Croatia

Croatia consolidates its position as a central player in the European liquefied natural gas (LNG) market. Buoyed by extreme weather conditions in the Eastern Mediterranean, where heatwaves drove up demand, Croatia recorded a massive influx of LNG in July 2023.
The country imported 206,000 metric tons of LNG, the highest volume for this month since 2021, surpassing imports from many other European countries.
The Krk regasification terminal plays a central role in this dynamic.
Thanks to its robust infrastructure and optimized storage capacity, Croatia has become a leading hub in Southeast Europe.
The country’s geographical location, combined with a clear energy strategy, enables it to capture cargoes that would otherwise have been destined for markets such as North-West Europe, where imports are in decline.

Adaptability and security of supply

Croatia is more than just an LNG gateway.
Since the start of the conflict between Russia and Ukraine, the country has stepped up its efforts to become a key supplier of natural gas to its neighbors, notably Hungary and Slovenia. This strategy is based on increasing regasification capacity and developing new pipelines.
The aim is to secure gas supplies in a region where demand continues to grow, particularly as winter approaches.
The Mediterranean region, of which Croatia is a part, currently benefits from higher LNG prices than those observed in North-Western Europe.
As of August 16, 2023, the Eastern Mediterranean LNG tariff stood at $12.832/MMBtu, a significant premium over other European markets.
This price differential attracts market players with transport flexibility, who prefer to deliver their cargoes to Croatia rather than to destinations with lower margins.

Geopolitical Challenges and Winter Outlook

The near future looks complex for Croatia and its regional partners.
The possible expiry of the gas transit agreement between Russia and Ukraine could have significant repercussions on gas supplies to Southeast Europe.
Currently, around 40 million cubic meters per day transit through the Sudzha interconnection point.
A sudden interruption in these flows would force the nations of the region to step up their efforts to secure their energy sources.
European market players are keeping a close eye on these developments, although the situation in North-Western Europe remains relatively stable for the time being.
Gas stocks are high, and supplies from the USA continue to provide a degree of security.
However, Croatia, as a strategic hub in the Mediterranean, could see its role strengthened in the event of increased supply tensions.
This rapid evolution of the Croatian LNG market testifies to the country’s ability to adapt to the changing dynamics of the European energy sector.
Croatia’s infrastructure, export strategies and geopolitical importance position it as an essential pillar of energy security in Southeast Europe.

Italian group Eni signs a twenty-year liquefied natural gas supply contract with US-based Venture Global, covering two mn tonnes per year and marking a first for the company from the United States.
The discovery of the Gajajeira field marks a major step for Angola, strengthening its natural gas development strategy and diversifying national energy resources in a context of sector transition.
The Voskhod vessel, under US sanctions, docked at the Arctic LNG 2 plant in Russia, marking the second visit by a sanctioned ship to the site this year, according to maritime tracking data.
Japan has urgently secured several additional cargoes of liquefied natural gas from the United States to avert an imminent electricity supply shortage caused by rapidly declining national reserves expected at the end of July.
The European Commission has unveiled a proposal to prohibit the import of Russian gas into the Union, sparking intense debate on its feasibility, contractual impact and consequences for supply security among several Member States.
CNOOC Limited announces the discovery of a significant oil and gas reservoir in the buried hills of the Beibu Gulf, opening new opportunities for shallow water exploration off the coast of China.
TotalEnergies’ Mozambique LNG gas project is at the centre of a legal challenge in Washington, following the approval of a $4.7 bn loan by the US Exim Bank, amid security concerns and opposition from civil society groups.
Investors are closely watching U.S. midstream companies’ announcements regarding new gas pipeline expansions targeting promising markets in the West and Northeast, beyond traditional regions in Texas and the Southeast.
PPL Corporation and Blackstone Infrastructure announce a strategic partnership to develop new gas-fired power plants to supply electricity to data centers through long-term contracts in Pennsylvania.
Falcon Oil & Gas Ltd announces a new record initial flow test result at the Shenandoah S2-2H ST1 well and the start of its 2025 drilling campaign in the Beetaloo Basin.
Technip Energies has secured a contract to lead preparatory works for a floating liquefied natural gas unit in Africa, confirming its presence in the international gas infrastructure market.
The Slovak government is seeking guarantees from the European Union to secure its supplies as talks continue over ending Russian gas and adopting a new round of sanctions.
ArcLight Capital Partners announces the acquisition of Middletown Energy Center, a combined-cycle natural gas power plant, aimed at meeting the substantial rise in energy demand from data centers and digital infrastructure in Ohio.
The commissioning of LNG Canada, the first major Canadian liquefied natural gas export facility led by Shell, has not yet triggered the anticipated rise in natural gas prices in western Canada, still facing persistent oversupply.
Horizon Petroleum Ltd. is advancing towards the production launch of the Lachowice 7 gas well in Poland, having secured necessary permits and completed preliminary works to commence operations as early as next August.
European Union member states have requested to keep their national strategies for phasing out Russian gas by 2027 confidential, citing security concerns and market disruption risks, according to a document revealed by Reuters.
TotalEnergies becomes a member of PJM Interconnection, expanding its trading capabilities in North America's largest wholesale electricity market. The decision strengthens the company's presence in the United States.
Turkey has connected its gas grid to Syria’s and plans to begin supplying gas for power generation in the coming weeks, according to Turkish Energy Minister Alparslan Bayraktar.
Despite record electricity demand, China sees no significant increase in LNG purchases due to high prices and available alternative supplies.
US natural gas production and consumption are expected to reach record highs in 2025, before slightly declining the following year, according to the latest forecasts from the US Energy Information Administration.