CROATIA'S INA AND ITALY'S ENI SIGN MEMORANDUM OF UNDERSTANDING ( Editorial: --> 8151 )

( Editorial: --> 8151 ) ZAGREB, Nov 4 (Hina) - Croatian and Italian oil companies INA and ENI signed a memorandum of understanding on Tuesday on supplying Croatia with about three billion cubic metres of natural gas a year, which will be used in industry, households and electricity production. The gas will be partly supplied from the Ivana gas field in the northern Adriatic, which is jointly run by INA and ENI (through another Italian oil company AGIP), while the rest will be provided by ENI from its own production in Italy. The document also envisages construction of a 130-km-long gas pipeline from the Italian coast via Pula to Karlovac. The project, estimated at 1.8 billion kuna (about $300 million), will be conducted by a joint firm to be established by ENI and INA. The memorandum was signed by INA Director-General Davor Stern and ENI Director Franco Bernabe after delegations of the two companies held talks with Croatian Prime Minister Zlatko Matesa. Speaking to reporters after the signing ceremony, the two directors expressed satisfaction with the signing of the memorandum, describing it as a continuation of the successful cooperation and announcing new joint projects. Matesa said that the memorandum provided an alternative source of natural gas, so that Croatia would no longer be dependent only on one supplier, Russia, as well as on domestic gas fields. Assessing the memorandum as a very important step in the cooperation of ENI and INA, Bernabe said that the two companies had been cooperating successfully for a long time and that their cooperation had been intensified in the last two years. "The project we have signed today is important both strategically and economically," Bernabe said. Stern said that it would be possible to expand gas supply to include neighbouring Bosnia-Herzegovina. "This is a large project and we envisage that it will be completed within two or two and a half years," Stern said. Croatian Economy Minister Nenad Porges said that the total value of the project exceeded $1.5 billion. In response to a journalist's question, Stern said that the price of gas was being negotiated, stressing that it should be competitive with the price of Russian gas. (hina) vm 042032 MET nov 97