The Greek Government is seeking to ensure the viability of an underground natural gas storage project in Kavala, northern Greece, so a tender can be launched once obstacles are cleared.
The Government will seek to secure the European Commission’s approval of state aid so the project is partly financed by national or EU funds, arguing that the facility will be used for strategic gas reserves. It is estimated that the Commission will find it hard to deny the petition amid the current energy crisis, given that Greece does not have sufficient natural gas storage capabilities and keeps mandatory strategic reserves for the winter in Italy.
Responding to criticism from investors that he is responsible for freezing the project, the president of the Regulatory Authority for Energy (RAE) Athanasios Dagoumas said that the South Kavala storage would have been particularly useful in the current energy crisis. However, since the project has already been stagnant for years, the floating storage unit at Revythoussa terminal partly makes up for the absence of a domestic storage capacity and the project is also expensive.
Last April, state privatization fund TAIPED announced that a consortium of GEK-Terna and natural gas transmission system operator DESFA and Energean Oil & Gas as a sole bidder, have qualified for the second, binding round of a tender for the development and operation of underground gas storage in the depleted natural gas field South Kavala.
Natural gas field South Kavala is located in the southwestern part of the Prinos-Kavala basin, in 52 meters of water depth in the North Aegean Sea, about 6 kilometers off the west coast of Thassos. The duration of the concession agreement will be up to 50 years. The conversion of the natural gas field South Kavala into an underground gas storage will be carried out by the concessionaire within a binding period to be determined in the concession agreement.
