The European Bank for Reconstruction and Development (EBRD) has provided 500,000 dollars in a grant for the elaboration of a feasibility study of a new gas pipeline that is supposed to connect Bosnia and Herzegovina's and Croatia's networks despite opposition by authorities in the Serb entity, local media reported on Wednesday.

The future gas pipeline will make it possible for Bosnia and Herzegovina to have access to the trunk pipeline which will also provide a connection with the future LNG terminal on the Croatian island of Krk.

The Sarajevo-based Faktor portal reported that this move would lessen Bosnia's dependence on gas supplies from Russia and Serbia.

The BH-Gas company's director Jasmin Salkic was quoted as saying that a tender for the preparation of the feasibility study would be advertised next week.

All the relevant documentation is to be completed in the next 12 months and it is expected that the pipeline will be operational in 2023 at the latest.

The “Southern Interconnection” project is regarded to be strategic by the authorities in the Croat-Bosniak Federation.

The future pipeline would extend from the southern Croatian town of Zagvozd to Posusje, Bosnia and Herzegovina and further on to Mostar and Travnik.

Croatia is expected to build a 60-kilometre long pipeline from Split to Zagvozd as part of the project, whereas the whole route from Zagvozd to Travnik is 114 kilometres with an additional 46 kilometres of a branch pipeline to Mostar.

The whole project is estimated to be valued at EUR 100 million.

A favourable loan to be granted by the EBRD will cover the costs. The grant for the feasibility study was ensured with the assistance of the USAID agency. An agreement to that effect was signed during the EBRD's 2019 Annual Meeting and Business Forum in Sarajevo earlier this month.

Earlier this year, the government in the Republika Srpska entity concluded that the project was not a priority for the entity and rejected it. Serb authorities withheld its support for a future Bosnia-Croatia agreement on interconnecting the two countries gas networks.