March 7, 2010 | Vladimir Socor

On March 2, in Moscow, Prime Ministers Vladimir Putin of Russia and Jadranka Kosor of Croatia opened the way for Russian state companies’ expansion into that country and to the Adriatic coast. The Moscow talks covered oil, natural gas, and shipbuilding. Croatia’s energy sector was almost entirely free of a Russian presence until now.

Putin and Kosor witnessed the signing of an agreement of intent whereby Croatia would be included in Gazprom’s South Stream pipeline project, albeit as an ordinary importing country, rather than a transit country. Signed by Russian Energy Minister Sergei Shmatko and Croatian Economy Minister Djuro Popijac, the agreement envisages the creation of a 50 percent - 50 percent joint company to design, build, and operate a branch-off line from the South Stream trunk line on Croatia’s territory.

The agreement does not establish a project company. It fails to mention whether the branch-off would enter Croatia from Serbia, from Hungary or Slovenia (all of which have already joined the South Stream project). Consequently, the choice of a route through Croatian territory is also left in abeyance. The route, throughput capacity, and financing of the Croatian line are to be discussed in the context of Gazprom’s feasibility study for the overall South Stream project. Moscow envisions completing that overall study during the current year (Interfax, March 2; HINA, March 2, 3).

This agreement of intent is to be followed up by a Russian-Croatian inter-governmental agreement. As is usually the case when discussing South Stream with potential customer countries, the Russian side did not identify gas reserves in Russia or elsewhere that would support the South Stream project

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