The Government of the Federation of Bosnia and Herzegovina (FBiH) has put forward a new implementation model for the Southern Gas Interconnection, a pivotal energy infrastructure initiative aimed at enhancing the nation’s gas supply framework. This revised proposal assigns US-based AAFS Infrastructure and Energy with the responsibilities of construction and operation of the pipeline, marking a significant shift in project management.
This project seeks to establish a connection between Bosnia and Herzegovina and Croatia’s gas transmission network, thereby facilitating indirect access to the LNG terminal located on Krk Island. The FBiH has submitted proposed amendments to the existing legal framework governing this project to parliament under an urgent procedure. This move aims to eliminate administrative hurdles that have previously impeded progress.
A notable aspect of the new proposal is the introduction of a long-term concession framework, which would allow AAFS to take charge of managing the pipeline. This strategic decision reflects an intent to engage an experienced international operator, which is expected to expedite project execution.
The Southern Gas Interconnection is recognized as a strategically critical project for Bosnia and Herzegovina, primarily due to its potential to decrease reliance on Russian gas by diversifying supply routes. By connecting with Croatia’s gas system, this initiative would provide Bosnia with alternative sources for imported gas, thereby enhancing overall energy security.
<pA significant alteration in the amended proposal is the exclusion of BH-Gas, a state-owned company, from its role as the designated project developer. BH-Gas had been previously tasked with overseeing this project but was removed following persistent political pressures, particularly from HDZ BiH, which advocated for a revised institutional arrangement.
Rather than establishing a new entity in Mostar as initially suggested, the updated plan proposes that a Sarajevo-based branch of AAFS assume operational responsibilities. This adjustment represents a political compromise aimed at resolving ongoing disputes that have plagued the project for several months.
Federal Minister of Energy, Mining and Industry Vedran Lakić emphasized that these changes are designed to accelerate implementation without reigniting political controversies. He underscored the importance of viewing this project as fundamentally linked to energy security for both residential consumers and businesses alike.
The proposed amendments will require approval from both chambers of the Federation Parliament. If passed, they will lay down the necessary legal and institutional framework to advance the Southern Gas Interconnection into a more developed implementation phase.
