Page 11 - Euroil Week 32 2019

EurOil PIPELINES & TRANSPORT EurOil
EU approves Croatia’s state aid for LNG project
CROATIA
Croatia’s $113mn loan does not contravene EU state aid rules.
THE European Commission has reported clear- ing Croatia’s use of state aid for construction of an LNG import terminal.
e proposed complex on the island of Krk is due to start up in 2021 and supply Croatia and its neighbours with up to 2.6bn cubic metres of natural gas per year at peak capacity.
Croatia has pledged €100mn ($113mn) in budget funding for the project, while also agree- ing to help cover its operating costs with a special tari on gas consumption. Both measures com- ply with EU rules on state aid, the EC said in a July 31 statement.
“The new LNG terminal in Croatia will increase the security of energy supply and enhance competition, for the bene ts of citizens in the region,” EU Commissioner for Competi- tion Margrethe Vestager commented. “We have approved the support measures to be granted by Croatia because they are limited to what is neces- sary to make the project happen and in line with our state aid rules.”
e project’s total cost is €233.6mn ($260mn),
with €101.4mn ($115mn) set to come from the EU’s Connecting Europe Facility (CEF) – a special grant fund for cross-border infrastruc- ture developments. The remaining €32.2mn ($36.4mn) will be covered by the project’s state- owned operator, LNG Croatia.
ere is some doubt as to how much demand there will be for the Krk terminal’s gas, given that the EU utilises only 25% of its existing LNG import capability. A binding open season held in January for the project’s capacity disappointed, securing bids for only around 0.5 bcm of annual supply.
Regardless, a nal investment decision (FID) on the terminal’s construction was nally taken in February, and the following month, Croatian o cials claimed Hungary - tipped as a recipient of the facility’s gas - was considering the purchase of a 25% stake in the project.
Norway’s Golar Power is slated to convert its 2005-built Golar Viking vessel to serve as the plant’s oating storage and regasi cation unit (FSRU). ™
Spain bans Austrian gas trader over supply shortfall
SPAIN
Gasela bought the gas from Ireland’s Solstar, but the supplies did not arrive.
SPAIN’S Energy Ministry has banned Austria’s Gasela from trading gas in the country for ve years for its role in causing a major supply de cit earlier this year.
The supply imbalance occurred between April 15 and 25, the ministry wrote in the o cial state gazette on August 9, a er an Irish operator called Solstar pledged to provide the Spanish market with far more gas than it had available. is caused a de cit of 2.544 TWh – equivalent to almost three LNG cargoes.
Solstar, which was also prohibited from trad- ing in late July, agreed to supply 200-300 GWh of this unavailable gas to Gasela. e Austrian rm in turn struck deals to sell these volumes tocustomers.
“Gasela trusted more than 90% of its supply portfolio, equivalent to 29.1% of average daily domestic demand during April, to a single sup- plier that had only been operating from April 1, 2019 in Spain, and had never injected gas into the system,” the ministry said. It said that Gasela had not taken steps to mitigate the supply risk.
Gasela has not responded to a request for a comment on the accusations. The company, involved in gas trading, transmission and storage in several European countries, is also suspected of fraudulent dealings with Solstar in the Nether- lands and Germany in January, according to the energy ministry. National energy regulators in those countries have alerted the pan-EU energy watchdog Acer about the activities.
“ erefore Gasela should have taken addi- tional measures to guarantee supply in its pur- chases from Solstar, as, by previous experiences in other countries, [it] could have been aware that Solstar might not provide the acquired gas, putting the security of supply of the national gas systematrisk,”theministrysaid.
Spanish gas demand soared 9.4% year on year in the rst half of 2019, as a result of hot weather, lower hydroelectric output and the reduced use of coal- red energy. Consumption hit 578 GWh on July 22 – the highest daily rate recorded in summer since 2010, according to grid operator Enagas. ™
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