Star Metro - US eyes European gas dominance through Balkans

Since Russia invaded Ukraine in 2022, gas supplies flowing from the east have become increasingly weaponised -- accelerating Brussels' plans to reduce its reliance on Moscow.

Russia still supplies around 12 percent of the bloc's gas imports, according to the European Council, but by the end of 2027 it will ban them completely.

To meet this deadline, the European Union has spent billions of euros on infrastructure to be able to handle the needed volumes of liquefied natural gas (LNG), which will make the bloc the largest importer in the world.

- Balkan push -

One of the key sites is Croatia's floating LNG terminal off the island of Krk, which following a recent upgrade is now capable of handling around two percent of the EU's annual gas consumption at nearly 6.1 billion cubic metres.

Connecting pipelines link it to Hungary, allowing US gas to flow into central Europe.

But energy analyst Ivan Brodic said its future could be much bigger, as the terminal's largest supplier -- the United States -- looks to push Russia out of the market completely.

Already the EU's largest source of LNG, the US is forecasted to overtake Norway as bloc's largest natural gas supplier in 2026, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

"Americans do not want Russian capital in the energy sector in this region anymore," Brodic told AFP.

"That is why they are pushing for the gas interconnection between Bosnia and Croatia."

The US-backed pipeline between the Balkan nations plans to link Bosnia to Krk, and loop it into Europe's gas network.

Some analysis suggests it could even offer the cheapest gas for a post-war Ukraine.

- 'Peace pipelines' -

Earlier this year, US Energy Secretary Chris Wright used a summit to promote the Trump Peace Pipelines Framework -- a plan to expand energy infrastructure across central and eastern Europe.

The US plan could turn Croatia into a major transit point for fuel imports, including oil, beyond the Balkans into other parts of Europe.

Alongside its LNG facility, Croatia also boasts oil pipelines connecting it to Bosnia, Hungary, Slovenia and Serbia -- capable of pumping nearly half a million barrels of crude per day.

"Energy dependence on Russia remains a strategic vulnerability in the region," said a State Department report submitted to Congress in May.

"Diversifying energy supplies, including with abundant US sources, enhances regional stability and prosperity."

- A Ukraine supply route -

For the EU and Croatia, the Krk terminal has already proven its value as its supply fully booked until 2036, according to LNG Croatia managing director Ivan Fugas.

"It was not only important for Croatia, but definitely also for the EU as it got an additional natural gas entry point," Fugas said.

The terminal, operating since 2021, was strongly supported by the US while Brussels funded nearly half of its more than 230 million euros cost.

The terminal's success has also been noticed in Kyiv.

Ukraine's underground storage operator, Ukrtransgaz, presented earlier this year an analysis showing that Croatia's LNG terminal could provide the cheapest route to supply the country.

Boasting one of Europe's largest underground gas storage networks, much of it dating back to the Soviet era, Ukraine could also solve a key problem of storing the large amounts of imported gas that could then also be sent elsewhere in Europe.

Ukrainian President Volodymyr Zelenskyy and Croatian Prime Minister Andrej Plenkovic met earlier this year to discuss energy supply and storage, but there have been no official announcements.

With major investments, it could become a shorter and cheaper route to Ukraine than existing options via Greece or Poland.

"But that does not mean anything if Croatia does not have the capacity," Fugas said, flagging the necessary pipeline upgrade for any new demand.

T. MacDonald--SMC