December 19 (SeeNews) - Croatian oil and gas company INA [ZSE:INA-R-A] said on Tuesday it signed a memorandum of understanding with its Bosnian peer BH Gas to step up their cooperation with the aim of bolstering Bosnia's gas market.
The MoU shows the willingness of the companies to partner in the field of natural gas supply and sales on the Bosnian market, INA said in a statement.
BH Gas plans to build three interconnections with Croatia in order to receive natural gas deliveries from INA. The countries will be connected in the north via the Slobodnica-Brod-Zenica pipeline, in the south via the Zagvozd-Posusje-Novi Travnik pipeline, and in the west via the Trzac-Bosanska Krupa pipeline.
Currently, Bosnia is completely dependent on Russian gas deliveries via Serbia.
INA will shortly provide its estimate of the selling price of natural gas in Bosnia and Herzegovina so that BH Gas can prepare a cost-effectiveness study necessary to obtain loans from international financial institutions.
"Through this collaboration INA has once again shown that it believes in the long-term perspective of the Bosnia and Herzegovina market and wants to improve its position on it," Tvrtko Perkovic, chief of operations at INA's oil and natural gas exploration and production division, said in the statement.
Besides the planned project, INA and BH-Gas also agreed to jointly explore the possibility of procuring gas from other sources using the existing pipelines.
BH Gas is based in Sarajevo, in the Federation, one of two autonomous entities that form Bosnia and Herzegovina. The other entity is the Serb Republic.