Residents, environmentalists to fight Croatia's LNG terminal

ZAGREB (Reuters) - Residents and municipal authorities on the Croatian island of Krk, a major tourist destination, have vowed to fight the construction of a floating liquefied natural gas (LNG) terminal due to begin in a few weeks.

The government decided in January to co-finance the terminal at the town of Omisalj with 100 million euros ($112.95 million). The European Union is also providing 101.4 million euros for a project that aims to reduce Croatia’s dependence on Russian gas imports.

Omisalj mayor Mirela Ahmetovic said the floating terminal violated urban planning rules, which come under the control of the municipal authorities. The government had also not conducted a proper environmental study, she said.

The town has asked the Constitutional Court to assess whether a law the government recently approved to accelerate the project is unconstitutional, she added.

Environmentalists in Omisalj managed to halt plans to build a port at the town for Russia’s oil exports 15 years ago.

Croatian Energy and Environment Minister Tomislav Coric insists the project will not harm the environment.

The terminal is due to start operating on Jan. 1, 2021, despite weak initial demand. So far it has received binding bids for just 0.52 billion cubic meters (bcm) of gas per year. Its overall capacity is planned at 2.5 bcm.

The terminal targets southeastern and central European markets, besides Croatia which consumes 2.7 bcm of gas annually.

An environmental group from Krk said the negative environmental effects of the floating terminal were clear.

“Some 8,000 cubic meters of underwater rock must be removed with dynamite. Also, we have no guarantee that chlorine would not be involved in the regasification process. Both are potentially harmful to sea life and to water quality,” said Vjeran Pirsic from Eko Kvarner.

Croatia’s gas production is falling and some 60 percent of its consumption is covered by imports from Russia, leading to calls for it to find new sources of energy supply.

“Over time, liquefied natural gas supply prices are likely to get close to the cost of gas from a pipeline, especially if LNG from North Africa becomes available,” said Miro Skalicki, an energy expert.

Reporting by Igor Ilic; Editing by Alexandra Hudson