Macesic & Partners updates

Activities for building LNG floating terminal in Krk in full swing
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • October 16 2017

The Krk liquefied natural gas terminal project changed course when the government decided to construct a floating terminal instead of the initially planned land-based terminal. The reason for this decision was to make the terminal operationally faster and reduce costs, since it was clear that the deadlines for making the land-based terminal operation were unattainable. Since the deadlines for building the terminal are short, LNG Croatia is simultaneously undertaking several activities in order to meet them.

Government continues to dictate gas prices for households
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • July 17 2017

As part of its goals, the Act on Amendments to the Gas Market Act sets out a new gas market model. Under the new gas model, on receiving a proposal from the ministry and following approval from the Gas Regulatory Agency, the government will set the maximum price for gas, according to which the wholesale supplier must sell gas to retail suppliers for households. It remains to be seen how this new gas market model will affect consumers, the economy and the overall gas market.

Government announces buy-out of INA shares after losing in arbitration proceeding with MOL
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • April 24 2017

The relationship between INA (the national oil and gas company) and MOL (Hungarian Oil and Gas Plc) goes back to 2003, when INA was privatised through a public procurement process. However, the Croatian government and MOL are in two international disputes over INA. Following a recent decision, the prime minister announced that the government will initiate the process to buy-out MOL's shares in INA.

Recent solar power and renewable energy initiatives
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • December 19 2016

Recent initiatives in the Croatian energy sector include the construction of the largest solar-powered irrigation system in Europe, which is already proving to be an ideal solution to water management in agriculture. Further, the government recently announced its plan to increase the renewable energy sources incentive fee. As a countermeasure, the government lowered the value added tax rate for electricity supply from 25% to 13%.

Croatia hosts forum on Three Seas Initiative to strengthen north-south corridor
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • September 26 2016

Participating countries at the recent Dubrovnik forum signed the Statement on the Three Seas Initiative, with the aim of connecting the north-south gas corridor, reviving cooperation between Adriatic, Baltic and Black Sea countries and unifying the European energy market. One of the initiative's key projects is the liquefied natural gas terminal on Krk Island in Croatia, which will be the backbone of the new gas corridor to the Baltics.

Croatian strategic energy projects ride out the political storm
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • July 18 2016

Key decisions affecting the Croatian energy sector were rendered in a recent government session, including the expedition of the first of four phases of the floating liquefied natural gas terminal on the island of Krk, and the approval of production-sharing agreements for the exploration and exploitation of hydrocarbons for six onshore blocks in northwest Slavonia. The decisions were issued during one of Croatia's most turbulent political periods.

Renewable energy and electricity update
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • April 11 2016

The Renewable Energy and High Efficient Cogeneration Act recently came into force, replacing a confusing and complicated legal framework which was discouraging to investors. The act is a huge step forward for renewable energy projects in Croatia. In addition, Croatia is implementing its EU objectives successfully and is following the global trend of switching to a clean energy economy.

Latest oil and gas industry developments
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • February 15 2016

In January 2016 non-partisan Prime Minister Tihomir Oreskovic formed a new right-wing government. As 2015 was an election year, almost all major projects – most of which had been initiated by the former left-wing government – were halted and related decisions postponed until after the elections. It remains to be seen which energy projects will be supported by the new government.

Call for equity for LNG terminal project
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • September 07 2015

The Krk liquefied natural gas (LNG) terminal project is progressing well. The project foresees the construction of an LNG terminal for the receipt, storage and regasification of liquefied natural gas on the island of Krk, with a nominal annual capacity of 6 billion cubic metres. In the latest development, future operator LNG Croatia Ltd recently announced a call for equity, hoping to attract potential industrial and pure equity investors to the project.

Second-quarter oil and gas update
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • July 13 2015

Following public debate, the Ministry of Economy has issued a revised report evaluating the environmental impact of offshore exploration and hydrocarbon production. In addition, the government has chosen preferred bidders for onshore oil and gas exploration bids and LNG Croatia has announced another tender for consultancy for the liquefied natural gas terminal on the island of Krk.

Licences granted for first Adriatic offshore exploration and exploitation tender
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • March 23 2015

The government has granted 10 licences for the exploitation and exploration of hydrocarbons in the Adriatic Sea. Meanwhile, the Ministry of Economy has opened a public debate on the strategic environmental impact of the exploration and production of hydrocarbons in the Adriatic, and the first onshore licensing round for the exploration and exploitation of hydrocarbons has closed.

Tender seeks advisers for LNG terminal construction preparations
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • November 24 2014

LNG Croatia has announced an international tender for business, financial and legal advisers for the construction preparations of a liquefied natural gas terminal on the island of Krk. Among other things, project advisers will be expected to advise on business and legal model preparation and drafting terminal capacities utilisation contracts. Each adviser must have relevant expertise and key personnel must be available.

Electricity market projects
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • September 29 2014

Despite much debate and opposition, the construction of a 500-megawatt-capacity coal-fired power plant – the Plomin C project – is finally moving forward. The project has been awarded strategic investment project status by the government. The Croatian Electric Utility Company has announced an invitation for expressions of interest for participation in the construction project for the Kosinj/Senj hydropower plant.

First oil and gas onshore tender
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • September 22 2014

The government has launched the first onshore licensing round for exploration and hydrocarbon production licences. The offshore licence round comprises approximately 15,000 square kilometres divided into six blocks located in the continental regions of Podravina and Slavonija. Meanwhile, the government has simultaneously prepared tender documentation for the first onshore licencing round for northeastern Croatia.

First offshore licensing round for Adriatic exploration and production opens
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • June 09 2014

On April 2 2014 the long-awaited first offshore licensing round for the exploration and production of hydrocarbons in the Adriatic Sea was opened. The bid round closing date is 14:00 on November 3 2014. The offshore licensing round comprises approximately 36,823 square kilometres divided into 29 blocks of between 1,000 and 1,600 square kilometres each.

Hydrocarbon exploration and exploitation tenders in the Adriatic
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • March 10 2014

The government recently announced that a tender is scheduled for April 2014 in which 29 blocks in the Adriatic will be offered for the exploration and exploitation of oil and gas. Allegedly, more than 30 oil and gas companies have already expressed their interest in the tender. Meanwhile, the Strategic Investments Act has also been introduced, to give preferential treatment to investment projects of national interest.

Government announces resolution process for INA-MOL dispute
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • October 14 2013

Steps were recently taken to resolve a lengthy dispute between the government and MOL (Hungarian Oil and Gas Plc) over INA (the national oil and gas company). A recently announced public tender for consultants for the dispute resolution negotiations between INA shareholders, the government and MOL suggests that the government expects the negotiations – which will ultimately decide INA's destiny – to be lengthy and complex.

New hydrocarbon exploration and exploitation regime
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • September 09 2013

The Hydrocarbons Exploration and Exploitation Act recently became effective. With the passing of the act the required legal framework for hydrocarbon exploration and exploitation, which also includes the Mining Act and the Concession Act, is now complete. Through the new act the state is seeking investors and potential partners to invest in hydrocarbon exploration both onshore and offshore in the Adriatic.

Opening up the energy markets
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • June 24 2013

Developments in the electricity and gas legislation signal the further opening up of the Croatian market to potential domestic and foreign investors. As part of the process of incorporating the EU Third Energy Package into Croatian law, the new Energy Act was passed in late 2012. The umbrella Energy Act regulates the energy market in general, while separate acts regulate the gas, oil, electricity, heat and renewables markets.

Working towards a free gas market
Macesic & Partners
  • Energy & Natural Resources
  • Croatia
  • April 22 2013

With the sale of most of the shares in Croatia's national oil and gas company to its Hungarian counterpart in 2006 and the passage of the new Energy Act, the government has lost control of the gas market. In response to this changing landscape, Croatia's strategic plan for the national gas market is based on two goals: ensuring a free market and developing a network that would facilitate this.

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