Natural Gas

Natural Gas

Gas Sector in BiH

Bosnia and Herzegovina receives natural gas from only one direction and from only one source – from Russia, transits through Ukraine, Hungary and Serbia. Except to this, BiH has no domestic production or storage of natural gas.

In order to ensure security of supply, it is necessary for BiH to expand sources and routes of supply and ensure access to gas storage facilities. The natural gas sector in BiH needs to be organized in accordance with transparent market principles, in order to enable competition and integration into the regional natural gas market.

USAID EPA project goals

Currently, no law regulates the manner of organization and functioning of the natural gas sector at the levels of the state, FBiH, or BD. There is only the Law on Gas of Republika Srpska (RS) which was adopted in 2018. The state-level law is a key missing piece of legislation that should define the roles and responsibilities of state institutions in the natural gas sector; once adopted, entity laws should be aligned with it. In so doing, it should be borne in mind that the legal framework in BiH needs to be aligned with EU directives that apply to BiH as a contracting party to the Energy Community.

The EPA project, through its own expertise and by engaging local and foreign energy experts, provides support to the relevant institutions in drafting new and amending existing laws and regulations to ensure that the natural gas sector in BiH is compliant with the BiH’s international obligations. This will improve legal certainty in the sector and enhance the gas sector’s development and enable its integration into the regional natural gas market.

Support in the preparation of draft laws and regulations in the natural gas sector

Although the laws will define the roles and responsibilities of the state- and entity-level institutions, regulations will then be needed to specify how the activities in the natural gas sector are to be carried out. The laws and regulations should, among other things, provide for competition in trade and supply activities, and economically efficient and technically safe transmission and distribution of natural gas. The EPA project is organizing meetings and workshops for participants in the natural gas sector to help BiH develop the internal natural gas market in line with the requirements of the Energy Community.

Assistance in the field of security of natural gas supply

The EPA project monitors and regularly reports on the development of regional projects that may affect the security of natural gas supply in BiH. Trans-European and regional projects of interest to BiH are those that are directly connected to Croatia and Serbia or pass through countries bordering Croatia and Serbia and may have an impact on gas networks in Croatia and Serbia.

Since a Liquefied Natural Gas (LNG) terminal was built in Croatia on the island of Krk and started operating on January 1, 2021, it is feasible that LNG could also meet part of the BiH demand for gas.

To improve the security of supply, BiH should either build its own gas storage facility or ensure access to gas storage facilities in neighboring countries. As the building of a gas storage facility is an expensive project, the EPA project is focused on supporting BiH in creating the preconditions to connect to the regional natural gas market and gain access to natural gas storage not only in Serbia and Croatia but also in the wider region.