DUBROVNIK, Croatia — Croatia can play a vital role in ensuring regional energy security by diversifying supply options for European countries and allowing them to reduce their dependence on Russian gas, U.S. Assistant Secretary of State Victoria Nuland said.

A prolonged price row between Russia and Ukraine has wider energy implications for Europe, which gets a third of its gas needs from Russia, and almost half of these supplies via Ukraine. Central and southeast Europe could face higher gas prices and potential shortages this winter.

Nuland said the price dispute, Moscow's annexation of Crimea and fighting in eastern Ukraine underlined the energy security threat facing Europe.

"Now, more than ever, we have to work to secure Europe's energy security, by ensuring diversity of supply, building up diverse flow capabilities and capacities and building up deeper networks throughout the continent," she said at the Croatia Forum diplomatic conference in Dubrovnik late on Friday.

"Croatia has an essential role to play, as an energy security hub for the 21st century... You (Croatia) have spectacular assets to do that so long you as you make smart choices as you are going forward," Nuland said.

Croatia, which joined the European Union last year, in April published a tender for gas and oil exploration off the Adriatic coast and will next week invite bidders to express interest for on-shore exploration of potential fields in the country's north.

It recently got a location permit that will allow a long-delayed liquefied natural gas terminal project in the northern Adriatic to move ahead.