The construction of a gas terminal in the port of Bar, which has been in the works for several years, has been actualized these days. One of the topics of the discussion on the economic cooperation between Serbia and Montenegro between the presidents Aleksandar Vučić and Jakov Milatović was the supply of our country with 2.7 million gas, per day, through a gas pipeline that would go from the future LNG terminal in Bar.
Montenegrin Prime Minister Dritan Abazović also spoke in Dubrovnik at the beginning of this month about the fact that Montenegro intends to build an LNG terminal in Bar and called on the countries of the region to unite in the construction of the gas pipeline. He emphasized that this project can be supported by the European Union.
LNG in Bar was initiated from the USA
The whole story started between Montenegrin and American politicians, with the emphasis that American gas for European consumers would reach this LNG terminal in the Montenegrin port.
Dr. Petar Stanojević, professor at the Faculty of Security and expert in energy, recalls that on February 24, 2020, Dragica Sekulić, the then Minister of Economy in the Montenegrin government, stated that the Port of Bar can be a base for the storage and distribution of liquefied gas from the USA to Europe. She revealed that negotiations have already begun between American and Montenegrin companies on potential cooperation in the field of LNG storage and distribution from the US to Europe.
“All this happened after the visit of Steven Winberg, US Assistant Secretary of State for Fossil Energy to Montenegro, during which he also visited Luka Bar. Vinberg stated that the Port of Bar has a serious potential for the distribution and storage of fossil energy and that the details and options of future cooperation should be considered,” says Stanojević, pointing out that at the time the Port of Bar confirmed that they can already transship containers with LNG and CNG, and that in the future, they are considering a plan to build a terminal with about 20,000 m3 of LNG tank space on an area of about two hectares.
Montenegro has almost no potential gas consumers
This energy expert states that at that time the only potential consumer of gas in Montenegro was KAP (Aluminium Plant) from Podgorica. Even then, it was about modest quantities that would be delivered to Podgorica in containers.
“Today, this company is only a pale shadow of the former Yugoslav giant. The question is how long it will continue to show signs of life. There were other potential users of gas, such as the Ironworks in Nikšić or a possible heating plant in Pljevlja. According to the available data, the current consumption of gas in Montenegro is zero, that is, we can talk about the consumption of natural gas only in the future”, Stanojević said explicitly.
Commenting that it is difficult to forecast anything about the development of a distribution network of natural gas that would supply households in Montenegro, due to the price of gas (which is why it is very slow in Serbia, for example), due to the fact that there is no major need in the coast and Podgorica behind the heating, Stanojević points out the very configuration of the terrain and the sparse population as a problem. This is why, as he says, all Montenegrins got phones only when mobile telephony appeared.
“In order for the investment in the LNG terminal in Bar to pay off, it is necessary to find a large enough market (consumers) for that gas. This could only be a newly built gas power plant in the immediate vicinity of Bar, because otherwise a gas pipeline would also have to be built. This is not impossible. There are certain documents and plans on this, considering that Montenegro undertook to close the Pljevlja Thermal Power Plant by October 2020 (thereby losing more than 40% of its own source of electricity supply), which, of course, was not implemented. It is also possible to switch the Pljevlja thermal power plant to gas, which would create the need for the consumption of more than 200 million cubic meters of natural gas per year,” says Stanojević.
Serbia – the only serious market for gas from LNG in Bar
“Therefore, the only serious market for gas from the Port of Bar is Serbia or possible gas power plants, one of which is right on the border with Serbia,” estimates the interlocutor of Energija Balkana.
It should also be noted that the Aleksandrovac – Tutin gas pipeline is currently being built in Serbia, with the completion of which the gas pipeline will practically reach the Montenegrin border. In addition, on the long side, the gas pipeline has already reached Užice and Zlatibor.
“Having the above in mind, it is clear why there is talk of a pipe that would be connected to Serbia via the metering and regulation station in Bjelo Polje and a gas pipeline that would reach it via Zlatibor from Serbia and from Bar from the south,” this expert points out, noting that “ nowhere is this southern branch explicitly mentioned. I think that two years ago, the Government of Serbia even approved a guarantee for borrowing by Srbijagas, for the construction of the gas pipeline from Zlatibor to Pljevlja, but it has not progressed far”.
Speaking about the mentioned capacity, that Serbia receives 2.7 million cubic meters of natural gas per day from Bar, Stanojević says that this amounts to about 1 billion cubic meters per year.
“About a third of Serbia’s natural gas needs could be met with this supply route. The fact that Montenegro is not a member of the EU is favorable, bearing in mind that then it does not have to blindly follow various sanctions policies that may be imposed. The problem may be that the future gas pipeline must be 280 to 300 km long and will certainly cost more than 300 or even 400 million euros. You have to take into account the configuration of the terrain and the distance that has to be overcome”, comments the professor.
In Stanojević’s opinion, the very profitability of this venture is questionable because of all this. As a possible solution, he cites obtaining grants from the EU or other international funds.
An alternative to the gas pipeline – the railway
“There are, of course, alternatives. Two rolling stock of 22 container wagons per day could replace the need to build a gas pipeline. True, there are safety dilemmas about how LNG should be transported by train.
It Is similar with oil and oil derivatives. Twelve compositions per day could replace the Adriatic pipeline in the supply of crude oil to Serbia. The Belgrade Bar railway is currently being reconstructed.
The EU In Projects of Common Interest does not mention the LNG terminal in Bar
It should also be borne in mind that Montenegro joined the Ionian-Adriatic gas pipeline project, which should be a continuation of the TAP gas pipeline and pass along the coast of Albania, Montenegro and be connected to the Croatian gas pipeline system. Stanojević points out that this pipeline also includes Projects of Common Interest (projects of common EU interest), within which the LNG terminal on Krk (Croatia) was built. And an LNG terminal is planned in Albania, with the help of EU funds.
“The terminal in Bar is not on that list”, states Stanojević, commenting: “As far as Serbia is concerned, every new direction and source of supply is welcome. Because, in this way, its energy security increases and it gets more competitors on the market, which should all lead to a reduction in energy prices”.
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