91 MARTINDALE CENTER FOR THE STUDY OF PRIVATE ENTERPRISE Further, the obligations of high transparency and enhanced public participation required by PCI status proved contentious. Several NGOs and the Municipality of Omišalj alleged the Environmental Impact Assessment (EKONERG, 2018) was rushed, procedurally flawed, and technically in breach of European Climate Law (Mileta & Simon, 2018). The EU Court of Justice holds that EIAs must examine an entire project; dividing it to examine only particular phases, so-called salami slicing, is illegal (European Commission, n.d.-a). A counter-study (Eko Kvarner…, 2017) argued the EIA’s consideration of the FSRU as a phase of the previously approved onshore terminal was misleading and illegal, underestimating impacts via salami slicing. A later critical analysis found that 80% of public consultation points collected as part of the EIA were rejected without consideration (Mileta & Simon, 2018). Omišalj also contended that the FSRU and 99-year permit violated constitutionally protected municipal jurisdiction over zoning, an irony sharpened by the fact that the Krk government had published a roadmap to transition the island to emissions-free status by 2030, a goal the terminal rendered unachievable. Over 14,000 Croatians signed a petition against the project, and three lawsuits were filed to address these concerns (Zuvela, 2019). Corruption scandal and initial controversies Between PCI designation in 2013 and the decision to publicly fund the project in 2016, significant private investment was withdrawn, notably by Hungarian energy company MOL, which was implicated in a high-profile bribery case against former Prime Minister Ivo Sanader. Sanader was accused of accepting payment in exchange for granting MOL a controlling stake in INA, Croatia’s national oil and gas company, during its privatization in the early 2000s (Aceris Law, 2025; MOL Hungarian Oil…, 2022; Zuvela, 2019). Complicating matters, Robert Ježić, a businessman involved in LNG terminal planning and former owner of the Krk site, served as a key witness, while court records alleged his ties to Russian energy interests (Karasik, 2019; Re:Common, 2019). Former Deputy Prime Minister Tomislav Karamarko, involved in the 2016 revival and acceleration, separately faced public allegations and trial for bribery in this same period, further undermining the project’s EU transparency obligations. Croatia’s ascendance to the EU presidency in 2020 in the midst of these allegations increased broader European distrust (Khan, 2020). Several prevailing narratives generated public distrust in the project: that Ježić had designed an onshore terminal connected to Russian interests and the Croatian government had redesigned an offshore terminal to satisfy American pressure at the expense of Croatian needs (Harper, 2018; Karasik, 2019; Re:Common, 2019). Surrounded by litigation, corruption, and political contention, the Krk terminal opened in 2021, having sold only half its capacity to HEP (Harper, 2018). However, five years later, the terminal operates at twice its original capacity; has sold several years of future storage; and imports LNG from US, Qatar, Trinidad and Tobago, and Nigeria (International Trade Administration, 2025; LNG Hrvatska, n.d.). Trilemma vertex 1: Energy security Croatia’s natural gas investments have three major motivations. Most germane is the security impact of competitive gas supplies for Europe given Russian market dominance and history of antagonistic supply manipulation. The second motivation is potential energy savings; third is reduced emissions if LNG is used as a transition fuel. Krk terminal strategic documents frame LNG as carbon offsetting, completely ignoring, however, the less popular and riskier methane that LNG infrastructure emits. History of Russian–EU energy conflict Russian gas market dominance in Europe has persisted since completion of a large pipeline from Siberia to satellite Soviet states during the Cold War. Russia has since maintained control of the supply, even through the Soviet states’ secession and realignments with Europe. Gazprom, owned and operated by Moscow, owns the entire Russian gas supply chain. This monopoly has endured thanks to stringent European restrictions on natural gas exploration and existing infrastructural path dependency. Reliance on Russian energy has become costly in the past two decades as Russia employed this leverage several times for political purposes. Geopolitical tensions, particularly concerning Ukraine, have triggered several energy crises. Gas supplies were cut off to Europe in 2006, 2009, 2012, 2015, and 2022, including throughout winters. Some sources attribute hundreds of deaths in Eastern Europe to this antagonism (Austvik, 2016; Stern et al., 2009). Russia also violated contract stipulations and demanded payments be made in rubles with Gazprombank accounts. Since the invasion of Ukraine and sabotage of the Nord Stream pipeline, the EU has reduced demand for Russian natural gas through the REPowerEU initiative. Croatia imported no Russian gas in 2025 (Institute for Energy Economics…,
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