US Ambassador to Bosnia and Herzegovina Michael Murphy accused HDZ BiH leader Dragan Covic of obstructing the Southern Interconnection project, which would connect the Croatian and Bosnian gas networks, thereby ending Bosnia's dependence on Russian gas.

The project is strongly supported by the Croatian government and it would also allow BiH to access Croatia's LNG terminal and buy liquefied instead of Russian gas. The United States is the world's biggest liquefied gas exporter.

Ambassador Michael Murphy said on his blog on Friday that Covic's “obstruction has prevented this vital project from moving forward.”

According to him, the obstruction stems from Covic, who is the leader of the strongest Bosnian Croat party, and his HDZ BiH insisting that the Southern Interconnection be managed by a new operator and not the Sarajevo-based state-owned BH-Gas company. What murphy sees behind is the intention to further divide the management of the gas sector in the country on ethnic grounds.

“Instead of moving forward with BH-Gas, the only organization with the capacity and preparation to undertake the project as the implementer, HDZ BiH is now insisting on the establishment of a second gas transmission system operator under ethnic Croat control. This has no basis in law and is both technically and economically illogical,” Murphy said.

Two days ago, he said the US government considered the Southern Interconnection as a very important project that should be realised as soon as possible.

“The creation of a second gas transmission system operator would increase costs to consumers, further fragment the BiH gas market, undermine (the Federation entity) government functionality, open the door to more Russian malign influence, and drastically complicate negotiations with financial institutions, as well as with Croatia on the construction of the interconnection, making the project all but impossible,” Murphy said in the blog.

Instead of creating new companies under ethnic control, he advocates improving and restructuring BH-Gas through management reform.

“BiH is at an energy crossroads, but HDZ BiH is blocking the path toward European integration and energy security,” Murphy said. “Which path will Dragan Covic choose? Failure to act soon will send a clear signal to BiH and the international community exactly where Covic’s priorities lie.”