The head of the US Agency for International Development (USAID) in Bosnia and Herzegovina, Peter Duffy, said on Monday that Bosnia and Herzegovina had to secure a new gas supply route because currently, it relied entirely on one gas pipeline, which supplied natural gas exclusively from Russia.
Efforts have to be made to secure alternative supply routes, Duffy said at a conference on the development of the natural gas market which USAID organised on Mt Jahorina outside Sarajevo.
Duffy stressed that the country's gas market had to be organised more transparently than was the case now, with the two entities each having its own gas policy.
After the 1992-1995 war in Bosnia, the country was internally divided into two semi-autonomous entities, the Bosniak-Croat dominated Federation (FBiH) and the Serb-dominated Republika Srpska (RS), with each having its own institutions, parliaments, and public companies such as gas and electricity company.
In practice, this results in unnecessary costs for the end user who depends on where entity administrative borders start, which makes it possible for suppliers to charge them for gas transport costs more than once, he said.
The USAID has decided to finance a feasibility study on connecting Bosnia's gas supply network with Croatia's by building a new gas pipeline to run from Zagvozd in southern Croatia to Posusje, in Bosnia's southern region called Herzegovina, where the pipeline would branch off towards Mostar and central Bosnia.
Under the project, initiated by the BH Gas company based in Sarajevo, this gas pipeline would be an alternative to a gas pipeline that has been transporting gas from Russia via Hungary and Serbia since the 1980s.
Connecting to Croatia's gas network would also provide an opportunity for Bosnia to buy liquefied gas from the future LNG terminal on the island of Krk.
The Serb entity government has so far refused to give its consent for the project, called “Southern Interconnection”, and insists that Bosnia and Herzegovina should connect to the Turk Stream pipeline, by which it would continue buying gas exclusively from Russia via Serbia.
