Damir Novinić, Agency for Investment and Competitiveness In some industries we have a competitive advantage which is visible; the most is in tourism
Energy renovation as an economic promoter Energy retrofit tenders are currently won by the most cost-effective bidders
Leather and footwear industry Several local companies have been operating successfully p against the backdrop of the situation
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Croatian Business & Finance Monthly Established in 1953 Monday / 4th February / 2013 Year VI / No 0222 www.privredni.hr
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GAZPROM IN CROATIA
Construction of the South Stream branch The gas pipeline branch will stretch from the Croatian border with Serbia to Slavonski Brod and is valued at €60 million Igor Vukić he Russian gas giant Gazprom wants to sell its gas on the Croatian market and participate in developing a liberalised Croatian market, said Aleksandar Medvedev, Deputy Chairman and main decision maker of Gazprom after a recent meeting with the Minister of Economy, Ivan Vrdoljak. Medvedev also announced Gazprom wishes to build a network of filling stations for liquefied natural gas for personal vehicles, business vehicles and buses. A similar plan was considered by the Austrian OMV prior to the crisis, but they did not achieve it, not only because of the crisis, but because of their new strategy. They have focused recently more towards oil and gas search, and less on retail. However, Gazprom wants to try out a new approach in Croatia. They sold gas to Ina for many years, and now, in line with longterm contracts, they wish to reach the end-user with their products. Medvedev announced that the final result would be a more cost-effective gas supplier for the public. The first step has already been made. Petrokemija from Kutina signed a contract with Gazprom regarding the annual supply of
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130 million cubic metres of gas at a lower price than Petrokemija paid in the past. The contracted quantity represents 20% of Petrokemija’s annual demand. Gazprom and Plinacro will build a gas pipeline branch of the South Stream project that will stretch from the Croatian border with Serbia to Slavonski Brod. They also signed a special action plan regarding this project. The project has a value of €60 million, and each partner will finance its own half.
Mladen Antunović, Chairman of the Board of Plinacro, says Plinacro will invest €10 million in the subscribed capital and take out a loan for the remaining sum. However, this is not a high-risk project, since Gazprom will rent the entire capacity of 2.7 billion cubic metres of the gas pipeline branch. Gazprom also announced their return on investment would range around 8%. The capacity of the new gas pipeline shows that Gazprom is extremely interested in market de-
velopment. However, the reasons are certainly not humanitarian. Medvedev announced their participation in the construction of gas power plants and the production of electricity, and that they would search for buyers in Croatia and the wider region. Analysts predict the price of gas could fall in the future, which is why gas producers look for possibilities of participating in the production of added value with higher profits. More information about the projects for producing electricity will be available by the end of the year, Medvedev announced. The construction of the gas pipeline branch will begin in July 2015 for Croatia. The first gas distribution is scheduled for December 2016. This will provide a safer supply. Along the supply routes through Slovenia and Hungary, it will be possible to obtain gas without mediators at a lower price. This will open the doors to other suppliers, which could result in lower prices. The Russian company is also interested in researching gas and oil sites in the Adriatic Sea and on land. The Government should immediately invite tenders for the search for hydrocarbons, and we are ready to participate with a concrete offer, Medvedev noted.