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PULA, Croatia, April 11 (Reuters) - Croatian gas trading company Prvo Plinarsko Drustvo (PPD) aims to expand into neighbouring Balkan states, looking to boost its retail operations even as it seeks to strengthen in its home market, its owner and CEO said on Thursday.
PPD is one of the two biggest gas wholesalers in Croatia, along with energy group INA, but it still has a very limited presence in retail, mostly in eastern Croatia.
“The retail market is very fragmented with many companies involved. We would like to expand our business in that segment and the easiest way would be through acquisitions,” Chief Executive Pavao Vujnovac told Reuters on the sidelines of an energy conference in Pula.
Croatia consumes about 2.7 billion cubic metres (bcm) of gas a year, with 40 percent of that covered by domestic production, which has been falling.
“We import more than 1 bcm of gas annually at the moment,” Vujnovac said. “Croatia will likely need to increase gas imports in the coming years and we want to strengthen our position in that context.”
PPD has a 10-year import contract with Russia’s Gazprom that expires in 2027, but the company buys gas on the open market.
Croatia, the newest European Union member, has liberalised its market for industrial users but the prices for households will remain regulated until 2021. The government has increased prices for households from April 1 by 6.9 percent on average, citing a rise in gas market prices.
“Other Balkan energy markets, like Bosnia or Serbia, are still behind in liberalisation, but we have set our foot there preparing for future opportunities,” Vujnovac added.
Vujnovac also said that Croatia’s plans to construct a liquefied natural gas (LNG) terminal in the northern Adriatic fit with PPD’s plans. The terminal is still struggling to find buyers for its planned capacity.
“The construction of the terminal is important for security of supply,” said Vujnovac.
“At the moment we cannot risk buying long-term capacity at the terminal. Our plan is to follow the market and the prices and then possibly buy delivery or certain capacity for a period of one year.”
Vujnovac added that PPD is also interested in buying some domestic production assets, referring to continuing exploration activities, mostly in northern Croatia.
PPD is a core company of energy holding Energia Naturalis, which is also involved in rail cargo business and energy storage facilities. (Reporting by Igor Ilic Editing by David Goodman)