The Croatian Government has instructed state-owned utility HEP to buy at least 1.1 billion kWh of natural gas, equivalent to about 1.1 TWh, following delays in refilling the country’s underground storage ahead of the 2026–27 heating season.
The measure follows a government review of injection rates at the Okoli underground gas storage facility. The assessment concluded that the injection plans submitted by storage users would not generate sufficient inventories before winter.
Okoli inventory levels and European storage context
Okoli was reported at 50.4% full, compared with 67.7% during the same period of 2025. The shortfall formed part of a wider European pattern, with average EU storage levels at 53.4%, down from 65.3% a year earlier.
The government said slower injections were driven largely by high wholesale prices. Gas futures were trading around €60–63/MWh, which led some suppliers to postpone purchases in the expectation that prices might fall before the end of the injection season.
HEP-Plin procurement and supplier-of-last-resort role
HEP was chosen to carry out the procurement because its subsidiary HEP-Plin is being designated supplier of last resort through a regulatory process overseen by the Croatian Energy Regulatory Agency. The designation places the state-owned group at the centre of Croatia’s emergency supply arrangements.
Croatia set a near-term target for Okoli to reach at least 80% by the start of October. European rules generally aim for 90% by 1 October, while limited flexibility allows inventories to stay no lower than 80% during October-to-December.
Capacity adjustments and commercial sensitivity
Before approving the intervention, the government consulted companies holding storage rights at Okoli. Users with unused allocations agreed to make capacity available voluntarily, enabling HEP-Plin to lease additional space beyond its existing entitlement.
The companies involved were not identified because their storage positions are commercially sensitive. The procurement shifts part of timing and price risk from private suppliers to the state-owned utility, requiring HEP to determine whether to buy promptly at higher prices or stage acquisitions if market conditions soften without affecting injection schedules.
LNG supply share and cost exposure from wholesale pricing
The cost impact depends on how purchases are scheduled and how gas is handled after it is stored. At around €60/MWh, buying 1.1 TWh implies a wholesale commodity value of roughly €66 million, before transport, storage, financing and balancing expenses.
LNG terminal role in Croatia’s gas inflows
Krk LNG is expected to contribute a large share of physical supply. About 70% of gas entering Croatia’s transmission system already arrives via the terminal, whose commercial capacity has been fully booked for more than a decade.
Balancing market behaviour with security-of-supply obligations
The intervention reflects a tension between market optimisation and security-of-supply requirements. Storage holders may prefer waiting for better prices, while governments cannot rely solely on speculative purchasing when winter adequacy depends on reaching required inventory levels.
Croatia has opted to use HEP’s balance sheet to address that gap.
