Industry Trend Analysis - East Adriatic Returning To The Spotlight - DEC 2017

BMI View: Montenegro's natural gas prospects will attract increasing investment in the country's energy sector. This highlights the potential of the broader East Adriatic with Albania and Montenegro emerging as two frontier hydrocarbon play s in the region.

Energean's recent announcement that its Montenegrin offshore assets may contain 1.8 trillion cubic feet (50bcm) of natural gas serves as a reminder of the potential of the eastern margin of the Adriatic Sea. Although the expected resources are relatively small, a potential discovery could have a major impact on the population of nearly 630,000 people. In accordance with the Action Plan 2016-2020, increasing security of energy supply is part of Montenegro's efforts to join the European Union.

The potential for gas could have further implications for the country's energy mix. Coal remains the dominant source of energy for power generation in the Balkans with a share of over 70%. The country's hydrocarbon potential could not only partly facilitate the transition from coal to cleaner sources of energy but could also improve Montenegro's balance of trade as energy imports remain a weighty fiscal burden.

Balance Of Trade
Goods Imports And Balance Of Trade (USDbn)
Source: BMI/Central Bank Of Montenegro

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