Bosnia, Croatia sign gas pipeline deal despite civil society backlash

Bosnia & Herzegovina and Croatia signed an agreement on April 28 to build a long-delayed cross-border gas pipeline, aiming to boost energy security and reduce reliance on a single supplier, even as civil society groups warned the project risks locking the region into costly fossil fuel dependence.

The agreement on the Southern Interconnection gas pipeline was signed in Dubrovnik by the Chairperson of Bosnia’s Council of Ministers Borjana Krišto and Croatian Prime Minister Andrej Plenković during the Three Seas Initiative Summit. The project will link the two countries’ gas networks along a route stretching from Split and Zagvozd in Croatia to Posušje, Tomislavgrad, Kupres, Bugojno and Travnik in Bosnia, with additional branches extending to cities including Mostar, Livno, Jajce, Čapljina and Tuzla.

In a statement, the Bosnian government said the agreement would ensure “a secure and stable energy supply and improving conditions,” adding that the pipeline would enable “the diversification of natural gas routes and sources,” and “enable the energy independence of Bosnia and Herzegovina”. 

Krišto described the deal as a milestone in a post on social media: “A major step forward: in Dubrovnik, on behalf of Bosnia and Herzegovina, I signed with Croatia the Southern Interconnection Agreement, boosting energy security and supply diversification. Grateful to our US partners.”

Plenković said the project would strengthen resilience in a volatile global environment, writing on X that it would, “by connecting to the LNG terminal on Krk, … ensure the diversification of gas supply. In doing so, we are strengthening the energy security and independence of Croatia and BiH, which is particularly important in challenging global circumstances.”

Diversification drive

Bosnia currently relies on a single route for natural gas imports, supplied via Russia through Serbia, leaving it exposed to geopolitical disruptions and price volatility.

The Southern Interconnection is intended to connect Bosnia to Croatia’s gas system and, crucially, to the liquefied natural gas (LNG) terminal on the island of Krk, which has emerged as a strategic entry point for non-Russian gas into Southeast Europe.

Under the agreement, each country will build and finance the section of pipeline on its own territory, while operational coordination will be handled by designated energy companies under government oversight.

The project is aligned with European Union energy policy and has been included in regional planning frameworks, including the European Commission’s Economic and Investment Plan for the Western Balkans.

Officials say it is also compatible with future hydrogen transport, reflecting longer-term decarbonisation goals.

Croatia’s government approved the agreement at a telephone session earlier on April 28, while Bosnia’s Presidency and Council of Ministers gave expedited consent. 

US backing

The presence of senior US officials, including US Energy Secretary Chris Wright, at the signing highlighted Washington’s support for the project, which it sees as part of a broader effort to reduce Russian influence in the region’s energy sector.

Previous statements from the US embassy in Sarajevo said that “American private-sector investors can ensure that construction of the Southern Interconnection will move quickly and will help secure affordable and reliable US liquefied natural gas.”

The pipeline has been under discussion for years but repeatedly stalled due to political disputes within Bosnia’s complex governance structure, particularly over who should operate the infrastructure.

Recent proposals to involve a private company, AAFS, linked to US President Donald Trump, have helped unlock progress but also triggered controversy.

Governance concerns

Transparency and governance issues have been at the centre of criticism from watchdog groups.

Transparency International Bosnia and Herzegovina warned that proposed legal amendments in the Bosnian Federation (FBIH) linked to the project “eliminates any possibility of competition” and could create a “dangerous precedent” by directly designating a private investor.

The organisation also cautioned that the use of expedited legislative procedures limited public scrutiny and increased the risk of “regulatory capture”, where decision-making could be influenced by political or commercial interests.

Energy policy experts have raised similar concerns about the economic structure of the project.

Pippa Gallop, Southeast Europe energy adviser at NGO Bankwatch, said the proposed framework would bypass the state-owned transmission company. “We’ve analysed the proposed amendments, which directly appoint this Trump-linked, newly-formed company AAFS as the investor instead of Federation-owned BH Gas — with no tender,” she said.

She warned that key elements of the project remained subject to opaque negotiations. “This would in our opinion breach the law on concessions, as would the fact that the amendments leave key decisions on the content of the contract to opaque negotiations between the Federation government and AAFS, raising red flags for corruption and excessive transfer of financial risks to the Federation.”

Gallop added that the financial burden could ultimately fall on taxpayers. “One way or another, the public is bound to end up paying, either via their bills or the Federal budget,” she said.

Climate goals 

Beyond governance issues, environmental groups have questioned whether expanding gas infrastructure is consistent with climate goals. In a joint statement issued on April 27, a coalition of 47 civil society organisations urged Western Balkan governments to reconsider new gas projects, warning they could entrench fossil fuel dependence.

“Governments are still planning new gas pipelines and power plants despite repeated energy crises,” Gallop said in the statement, cautioning that such investments risk becoming stranded assets or requiring heavy public subsidies.

The groups argued that planned infrastructure, including the Bosnia-Croatia interconnection, could significantly increase gas consumption in a region where usage is currently relatively low.

They instead called for greater investment in renewable energy, grid modernisation and electrification.

Critics also question the scale of the project relative to Bosnia’s current energy mix.

“While the need for FBIH to free itself from Russian gas is clear, gas makes up less than 3% of Bosnia and Herzegovina's energy supply, and is mostly used for heating in Sarajevo,” Gallop said.

She added that the timeline for construction could limit its immediate impact. “The pipeline would anyway come too late to replace Russian gas, as we expect it would take up to a decade to complete,” she said.

Strategic stakes

Supporters argue that despite the concerns, the strategic benefits of diversification outweigh the risks.

The pipeline is designed as a bidirectional system, allowing gas to flow in multiple directions and potentially positioning Bosnia as a transit route in the future.

Officials say it will improve market integration, enhance resilience and provide access to alternative supply sources, including LNG and potentially gas from the Caspian region.

For Croatia, the project reinforces its role as a regional energy hub, leveraging the Krk LNG terminal’s growing capacity. For Bosnia, it represents a step towards reducing dependence on a single supplier, even as debates continue over cost, governance and long-term energy strategy.