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.

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.
Naftogaz announces the launch of a natural gas well with a daily output of 383,000 cubic meters, amid a sharp decline in Ukrainian production following several military strikes on its strategic facilities.
Sonatrach and ENI have signed a $1.35 billion production-sharing agreement aiming to extract 415 million barrels of hydrocarbons in Algeria's Berkine basin, strengthening energy ties between Algiers and Rome.
Maple Creek Energy is soliciting proposals for its advanced 1,300 MW gas project in MISO Zone 6, targeting long-term contracts and strategic co-location partnerships with accelerated connection to the regional power grid.
VMOS signs a USD 2 billion loan to finance the construction of the Vaca Muerta South pipeline, aiming to boost Argentina's energy production while reducing costly natural gas imports.
According to a Wood Mackenzie report, Argentina could achieve daily gas production of 180 million cubic metres per day by 2040, aiming to become a key regional supplier and a significant exporter of liquefied natural gas.
Côte d'Ivoire and the Italian group Eni assess progress on the Baleine energy project, whose third phase plans a daily production of 150,000 barrels of oil and 200 million cubic feet of gas for the Ivorian domestic market.
The extreme heatwave in China has led to a dramatic rise in electricity consumption, while Asia records a significant drop in liquefied natural gas imports amid a tight global energy context.
E.ON, together with MM Neuss, commissions Europe’s first fully automated cogeneration plant, capable of achieving a 91 % fuel-use rate and cutting CO₂ emissions by 22 000 t a year.
Facing the lowest temperatures recorded in 30 years, the Argentine government announces reductions in natural gas supply to industries to meet the exceptional rise in residential energy demand across the country.
Solar power generation increased sharply in the United States in June, significantly reducing natural gas consumption in the power sector, despite relatively stable overall electricity demand.
Golden Pass LNG, jointly owned by Exxon Mobil and QatarEnergy, has asked US authorities for permission to re-export liquefied natural gas starting October 1, anticipating the imminent launch of its operations in Texas.
Delfin Midstream reserves gas turbine manufacturing capacity with Siemens Energy and initiates an early works programme with Samsung Heavy Industries, ahead of its anticipated final investment decision in the autumn.
Norwegian group DNO ASA signs gas offtake contract with ENGIE and secures USD 500 million financing from a major US bank to guarantee future revenues from its Norwegian gas production.
Golar LNG Limited has completed a private placement of $575mn in convertible bonds due in 2030, using part of the proceeds to repurchase and cancel 2.5 million of its own common shares, thus reducing its share capital.
Shell Canada Energy announces shipment of the first liquefied natural gas cargo from its LNG Canada complex, located in Kitimat, British Columbia, primarily targeting fast-growing Asian economic and energy markets.
The Australian government is considering the establishment of an east coast gas reservation as part of a sweeping review of market rules to ensure supply, with risks of shortages signalled by 2028.
The increase in oil drilling, deepwater exploration, and chemical advances are expected to raise the global drilling fluids market to $10.7bn by 2032, according to Meticulous Research.