The Greek state has announced a plan to resume procedures for the establishment of underground gas storage at a natural space with depleting gas reserves in the south Kavala region, northern Greece. This renewed attempt highlights the project’s importance.

An amendment submitted to Parliament on the issue underlines that utilization of the natural space as a gas storage facility will contribute to energy adequacy matters for both the country and the wider region, while also ensuring necessary strategic reserves.

The amendment, which grants Energean Oil & Gas a one-year extension on its exploration rights at the reserve until November 23, 2015, accompanied ratification procedures for exploration and exploitation deals at three onshore and offshore locations along Greece’s western flank, in Ioannina, Katakolo, and the Gulf of Patras.

Otherwise, the operational and maintenance costs of facilities at the south Kavala location would have been transferred to the Greek state had Energean’s license expired this coming November 23, and consequently burdened the state budget.

It is estimated that TAIPED, the State Privatization Fund, will need some time to prepare and stage a tender for usage rights of the underground gas storage facility. The output of the Kavala gas reserve, not yet fully depleted, is being used as a supportive tool by Energean for oil extraction work in the nearby Prinos basin, as well as the firm’s electricity and steam production needs.