FBiH Government Adopts Draft Law on Southern Interconnection Gas Pipeline

SARAJevo, (Patria) - The Government of the Federation of BiH, at today's session in Sarajevo, adopted the Draft Law on the Southern Interconnection Gas Pipeline between Bosnia and Herzegovina and the Republic of Croatia, which regulates issues of significance for the realization of the project of constructing this gas pipeline on the route Zagvozd (Republic of Croatia) - Posušje (Bosnia and Herzegovina) - Tomislavgrad - Šuica - Kupres - Bugojno - Novi Travnik/Travnik, with a branch to Mostar within the territory of the Federation of BiH.

The project includes infrastructure, the interconnection point, the investor, the financing method, public interest, and the implementation of expropriation of real estate, land use, administrative procedures for issuing permits, and the involvement of cantonal governments, relevant ministries, and other administrative bodies, institutions, and business companies, as well as other issues of significance for its realization.

The coordinates of the interconnection point of the transport systems will be defined by a special agreement between the two neighboring transport system operators: the Public Company for Production and Transport of Gas BH-Gas d.o.o. Sarajevo from BiH and Plinacro d.o.o. from the Republic of Croatia, and it is an integral part of the Intergovernmental Agreement between Bosnia and Herzegovina and the Republic of Croatia on the construction of this gas pipeline.

The investor for the gas pipeline project is BH-Gas, and it will be financed by funds from international institutions secured through credit debt and grants, as well as the investor's own funds. The repayment of the loan will be secured by revenues generated from the collection of transport/transit tariffs.

This legal solution also establishes public interest for the construction of the gas pipeline for the purpose of expropriation, partial expropriation, and temporary occupation of real estate necessary for the construction, operation, and maintenance of its infrastructure.

Municipal administrative services responsible for expropriation procedures are tasked with ensuring priority work by specially formed commissions on expropriation cases related to the realization of this project, and the governments of the cantons where the Southern Interconnection of BiH and Croatia is located, along with relevant institutions and authorities, commit to carrying out the necessary procedures and making appropriate decisions required to ensure the project's realization within their jurisdiction.

As stated in the explanation for the adoption of this law, the Federation of BiH is currently supplied with natural gas from only one route and one source, using a transport gas pipeline that crosses the border of Serbia and Bosnia and Herzegovina at the location of Šepak and continues to Zvornik, Kladanj, Sarajevo, Zenica, and Travnik.

In addition to the fact that the Federation of BiH is dependent on only one source and supply route, it is emphasized that the existing gas pipeline, built in 1979, is characterized by obsolescence and heavy load during winter periods when gas consumption is highest.

Therefore, the construction of a new gas interconnection is recognized as a project of the highest priority for the Federation of BiH and is included in all key strategic, planning, and development documents adopted at the level of the Federation of BiH and BiH, including the Indicative Energy Strategy of BiH until 2035,

the Indicative Energy Strategy of the Federation of BiH until 2035, and the Public Investment Program of FBiH 2020-2022.

The realization of the Southern Interconnection project is marked as crucial for maintaining the security of natural gas supply in the entire Federation of BiH, as well as for diversifying sources and routes of natural gas supply, which is why this project is one of the most important strategic infrastructure projects in the energy sector in FBiH.

Due to all of the above, it was necessary to proceed with the development of a special law that would regulate the issue of constructing the Southern Interconnection by prescribing special administrative procedures for issuing permits with shortened deadlines, thereby ensuring the efficient realization of this strategic project. This need was recognized by both houses of the FBiH Parliament, which, through conclusions, tasked the Government of the Federation of BiH to prepare and submit the text of this law to the legislative procedure.