Montenegro intends to build an LNG terminal in the Port of Bar. In May, the Government of Montenegro signed a memorandum with its American partners on its construction, and Prime Minister Dritan Abazović then called on all the countries of the region to unite in the construction of the gas pipeline. After a recent meeting with the President of Montenegro, Jakov Milatović, in Belgrade, Serbian President Aleksandar Vučić said that Serbia is interested in the port of Bar being a new alternative route for supplying Serbia with gas, in addition to the terminal in the Greek port of Alexandropuli.
– Serbia is interested in buying part of the liquefied gas and we are ready to immediately release the steel pipes to the measuring station, which would be in Bijelo Polje, so that we can connect and receive gas, about 2.7 million cubic meters on a daily basis, which can significantly help us in further security of supply and diversification – specified Vučić at the time.
Energy expert from Montenegro Predrag Drecun believes that both Montenegro and Serbia would benefit from this investment. He states that Serbia is largely dependent on gas and states that the Port of Bar is the closest to it, and therefore a logical source of supply. On the other hand, the energy expert from Serbia, Miloš Zdravković, states that the project could be profitable while the war in Ukraine continues, but that the gas pipeline would cost significantly more because the mountainous terrain is also inaccessible in Montenegro.
Where would the gas come to Bar from and who would be the main user?
When asked whose liquefied petroleum gas would be delivered to Port Bar, Drecun stated that he was not aware of it at the moment, but that as soon as American investors are interested, it would be logical for them to be American companies.
– We see that mostly the Americans and the French do the most LNG terminals. They know where the future is, they always look two, three steps ahead – said Drecun.
Zdravković says that the announcements from Montenegro about the construction of an LNG terminal are very serious and that it could be a very useful job for the state of Montenegro, but he is afraid that the only potential user of such an infrastructure would be Serbia.
– Due to the configuration of the terrain, due to the population of Montenegro, considering that 80% of the population lives in Podgorica and on the coast, they do not need gasification for those reasons. Montenegro does not have any industry, the only potential consumer would be the Aluminijumski kombinat (KAP) in Podgorica, but it is no longer the giant from the old Yugoslavia. Possibly, where they could find the needs, that is, the model to build something like that for their needs, is to substitute the production of electricity from coal from their Pljevlja TPP.
Their plan was to abandon coal by 2020, and in that way they would be without more than 40% of their own electricity sources – said Zdravković.
How would the gas be delivered to Serbia?
Asked how liquefied petroleum gas would eventually be delivered to Serbia, Drecun says that a branch of the gas pipeline would have to be built, because it would be expensive to transport it in another way, although, he says, it would be possible by rail and road transport.
Drecun believes that the construction of the gas pipeline branch would not be an expensive investment, that at the moment it is difficult to say how much it would cost, but that a gas pipeline could be built along with the highway that is being built, which would then significantly reduce costs. He states that Montenegro and Serbia could also invest in the construction of the gas pipeline branch.
– I don’t know if other countries of the Open Balkans are interested, an initiative that shows extraordinary results, and I don’t understand why Montenegro has not yet joined that story considering that it also has the support of the American administration – said Drecun.
Zdravković, however, said that the technology of building the terminal itself is not problematic, nor is the construction of the gas pipeline, but that the gas pipeline would cost significantly more because the mountainous terrain is also inaccessible in Montenegro.
– An alternative could be, if we want to take gas from Montenegro, a railway composition with two compositions, 22 containers for the expected amount of 2.7 million tons per day, that is, about one billion cubic meters, which is about a third of Serbia’s needs at the moment of consumption, although the need for gas will only grow in the future. As for the gas pipeline, I don’t think there is anyone to finance that infrastructure. We are talking about some EUR 400 million for the construction of a gas pipeline to Serbia through Montenegrin mountains and hills – said Zdravković.
How much would gas cost Serbia?
Drecun says that the price of gas coming from Montenegro to Serbia would be competitive with Russian gas.
– The very economy in storage is 600 times more favorable with other cost reductions. More and more modern ships and tankers are being built, you can’t even order a tanker as much as the demand is, the Chinese make mostly those ships. I believe that an economic calculation could be found, I’m quite sure, something could also be built for Montenegro in the north, some gas infrastructure that could be used to heat several cities in Montenegro – said Drecun.
On the other hand, Zdravković points out that everyone is talking about the need to diversify gas supply routes in Europe and in the Balkans, while ignoring the fact that liquefied petroleum gas is more expensive.
– Due to production and transportation technology, it simply has to be more expensive. At this moment, when there is a crisis in Ukraine due to the lack of gas and the impossibility of supply, such projects can be thought about, but the moment the crisis in Ukraine ends, it will not be competitive. From the point of view of Serbia, which would potentially be the largest, that is, the only consumer of that gas, which is on the Turkish Stream line, I am afraid that we are talking about a totally unprofitable investment – Zdravković believes.
When could construction begin?
The Montenegrin Directorate for Oil and Gas told Euronews Serbia that the American side estimates that the price of the terminal project would be in the range of 130 to 250 million EUR, while the start of the works is expected at the end of 2025. As they state, on May 12th this year, representatives of the American companies Enerflex Energy Systems Inc and Wethington Energy Innovation LLC signed a Memorandum of Understanding with the Prime Minister of Montenegro, Dritan Abazović, regarding the provision of support for the improvement of energy infrastructure in Montenegro.
According to the head of the Montenegrin Directorate for Oil and Gas, Zorana Sekulić, the LNG terminal project envisages an unloading dock that would be able to receive 25,000 barrels per hour, and the storage would have an approximate capacity of 250,000 barrels. Another project, he adds, is the installation of a combined cycle gas power plant, with a capacity of at least 240 MW and a maximum of 440 MW, which would be located in the immediate vicinity of the LNG terminal and near the Montenegrin power grid.
Sekulić says that the total investment of the thermal power plant project is estimated to be between EUR 200 million and EUR 500 million, depending on the installed capacity.
When asked how realistic is the financing of that project from European funds, Zdravković said that about 20 years ago, when there was much more money in Europe, it was realistic, but now it is not.
– Even the problem of financing the Adriatic-Ionian gas pipeline that would connect Albania, Montenegro and Croatia, there is no talk about it even there. European documents mention the port of Durrës, Croatian terminals, Montenegro is not mentioned in those lists. Those stories are very nebulous, that is, on a long stick, we should be honest and say that no one from the EU promised free money for the construction of this kind of infrastructure – said Zdravković.
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