Still only one cargo received at Croatia LNG terminal since 2021 startup

Despite all capacity booked at 2.6 Bcm/year site

High spot LNG prices seen drawing cargoes away

Pick-up in deliveries to Croatia expected soon

London —
Almost six weeks since it began operations, the new 2.6 Bcm/year capacity LNG import terminal in Croatia has still only received one cargo, with high prices elsewhere seen pulling supplies away from Europe.

The LNG Croatia — a dedicated FSRU acting as a gateway for international LNG supplies into Croatia and the southeast European region for the first time — received its first cargo on Jan. 1 from the Cove Point export terminal in the US.

Since then, however, no more cargoes have arrived, according to S&P Global Platts trade flow software cFlow, despite all its capacity having been booked until the end of September 2023.

“It is odd that only one cargo was delivered in January,” an LNG trader said. “I am hearing the tanks are close to empty. I assume the high prices prevented cargoes coming,” the trader said.

Spot LNG prices have been hit by extreme price volatility over the past 10 months, with the JKM benchmark spot Asian LNG price hitting an all-time low of $1.825/MMBtu at the end of April before rising to an all-time high of $32.50/MMBtu in mid-January.

It is not just Asia that pulled cargoes away from Europe in recent months due to the higher price environment, however.

Market participants have also said volume that was supposed to go to Croatia was instead diverted to Turkey after strongly priced tenders were awarded in 2020.

But traders now expect cargoes to begin arriving soon into Croatia as the JKM spot Asian price drops back.

Capacity holders

A total of 1.88 Bcm of capacity has been booked at the facility for the period Jan. 1-Sept. 30, 2021, with the full capacity of 2.6 Bcm/year booked for the following two gas years.

Among the capacity holders are the Croatian trading subsidiaries of Switzerland-based MET and Hungary’s MFGK, Qatari-owned PowerGlobe Europe and Croatian utility HEP.

The relative size of the players could have put them off paying the recent high spot LNG prices, a Switzerland-based trader said.

MFGK has already agreed a deal with Shell for 0.25 Bcm/year of LNG supply into the Croatian terminal that will then be shipped onward to Hungary.

And HEP held a tender at the end of 2020 for the delivery of five LNG cargoes between January and September 2021.

Typical cargoes from the US carry some 0.1 Bcm of gas equivalent, suggesting that Croatia could expect to import around 19 cargoes by end-September if all the capacity were to be used.

Croatia LNG — a joint venture of Croatian players Plinacro and HEP — operates the FSRU project.

Opening ceremony

On Jan. 29, Croatia’s Prime Minister Andrej Plenkovic officially inaugurated the facility — along with a new pipeline linking the terminal to the Croatian gas grid — during a ceremony at the site.

“The LNG terminal project, together with the Zlobin-Omisalj interconnector, is not just one in a series of projects with a limited duration, it is one of the most complex projects in the gas business, in our recent history, which is crucial for the gas market in Croatia and this part of Europe,” Croatia’s energy minister Tomislav Coric said.

The project operator took FID in January 2019 after the Croatian government decided to give it a grant of Eur100 million ($117 million) towards the total estimated cost of Eur234 million.

That was in addition to funding of Eur101.4 million from the European Commission.