Croatia's Crodux Plin buys gas pipeline to Zarubezhneft Bosnian refinery

The deal will enable gas supplies to the Brod refinery and will result in additional revenue for Plinacro from the gas transportation once the supply starts running, Plinaco said in a statement after the signing ceremony. The contract was signed on Thursday by the head of Plinacro, Ivica Arar, and the director of Crodux Energetika, Branko Radosevic, in the presence of Brod refinery CEO Anatoliy Karalyus.

Crodux won the deal following a public tender opened by Plinacro for the sale and transformation of the existing oil products pipeline linking Slobodnica to Brod into a gas pipeline.

In May the two Croatian firms and the Bosnian refinery agreed on the project aimed at feeding gas to the refinery in order to reduce cross-border air pollution by converting its operations away from heavy fuel oil.

Back then, Plinacro and Crodux Plin signed a preliminary agreement on connecting a Crodux Plin future direct pipeline to Plinacro's gas transmission system in Slobodnica, with Crodux Plin pledging to transform the Slobodnica-Bosanski Brod oil products pipeline into a gas pipeline for the needs of the Brod refinery within 11 months.

The refinery is located in Brod, on the southern bank of the Sava river, which in this section forms the border between Bosnia and Croatia. Across the river, on the northern bank, lies Slavonski Brod.

According to earlier media reports, Crodux Energetika - the electricity production arm of the Crodux Plin group, has pledged to invest 24.5 million kuna ($3.7 million/3.3 million euro) in the pipeline.

Under a separate agreement signed in May with the oil refinery and Zarubezhneft, Crodux Plin will supply the Bosnian refinery with gas over a ten-year period.

Zarubezhneft's general manager Sergey Kudryashov said in May that the operations of the Brod refinery had been suspended since March for a regular overhaul, adding the refinery will resume operations in 2020 once it is connected to the gas supply system.

The Brod refinery will fully meet the EU environmental standards after the overhaul, Kudryashov said at the time.

(1 euro = 7.45220 kuna)