Roundup: LNG by 2020, South Stream not priority: Croatia official

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ZAGREB, July 22 (Xinhua ) -- Croatian Economy Minister Ivan Vrdoljak said on Tuesday that a liquefied natural gas (LNG) terminal on the Croatian northern Adriatic island of Krk was on the European Commission's list of priorities and that it should be built by 2020 at the latest.

"Energy supply is a priority on the lists of projects which might be funded by the European Commission," Vrdoljak said.

A development permit would be issued the moment the government named the LNG terminal a strategic project, said Vrdoljak, adding that this would happen very soon and that the terminal could be built by 2019 or 2020 at the latest.

The Connecting Europe Facility (CEF) fund was opened for such projects and Croatia will apply in August for the co-financing of the terminal's design project and other documentation necessary so that CEF could later finance construction.

He expected part of the documentation to be financed this year so that Croatia could apply for the construction of the terminal, likely in the second half of 2015.

The minister also explained that the building of the terminal without transport pipelines made no sense and that Croatia would apply for CEF co-financing of the pipelines, independently of the terminal.

The European Commission is to pay a maximum 50 percent of the construction costs, about 320 million euros (432 million U.S. dollars). As for evacuation pipelines, whose construction is estimated at 440 million euros, the goal is also to have half of the cost co-financed, according to him.

Asked if the construction of a South Stream gas pipeline section through Croatia had been agreed with Russia's Gazprom, Vrdoljak made clear it was not Croatia's priority.

"That is not Croatia's priority because Croatia is not on the main route and does not profit from the transport, so the section could be feasible only for new consumers, which was openly said to Gazprom," Vrdoljak said.

There were talks last week in Dubrovnik, the Croatian southern coast town, about the energy issue during the 9th Croatia Forum. Scores of politicians and businessmen from southeast Europe gathered there, while the star of the "Brdo Brijuni Process" was German Chancellor Angela Merkel.

Merkel gave the green light to the crossborder projects approved by the European Commission, namely Muenchen-Istanbul railroad and Adriatic-Ionian Highway.

Croatian President Ivo Josipovic added the LNG terminal on the list of projects, but shied away from mentioning the South Stream.

Earlier at the Forum in Duibrovnik, Russian deputy foreign minister Alexey Meshkov accused the EU of blackmailing the countries in the region with the candicacy status if cooperating with Russia.

"The European Union should not use the ambitions of Western Balkan countries to join it to force them to choose between Europe and Russia," Meshkov said.

"Nobody here doubts the importance of setting up additional energy supply routes from Russia to Europe. One of the most important tasks is the development of cross-border infrastructure projects such as the South Stream gas pipeline," Meshkov said.

He regretted that there was still a political approach to such an important project, recalling that EU-Russia dialogue on the legal and technical aspects of South Stream had been literally blocked.

"We expect the partners in the countries of the region to be more active in the dialogue with the European Commission regarding South Stream, or they will lose the chance for big investments and thousands of jobs," he said, recalling that Austria's OMW had clearly committed to the project.

On the other hand, U.S. Assistant Secretary of State Victoria Nuland said Croatia could play a vital role in ensuring regional energy security by diversifying supply options for European countries and allowing them to reduce their dependence on Russian gas, in other words - "make smart choices".

"Now, more than ever, we have to work to secure Europe's energy security, by ensuring diversity of supply, building up diverse flow capabilities and capacities and building up deeper networks throughout the continent," she said at the Croatia Forum diplomatic conference in Dubrovnik last Friday.

"Croatia has an essential role to play, as an energy security hub for the 21st century ... You (Croatia) have spectacular assets to do that so long as you make smart choices as you are going forward," Nuland said.

Croatia, which joined the EU last year, in April published a tender for gas and oil exploration off the Adriatic coast and will invite bidders to express interest for on-shore exploration of potential fields in the country's north. (1 euro = 1.35 U.S. dollars)