France’s Engie interested in Kavala gas storage project

French energy group Engie, a successor of Europe’s oldest energy company GdF Suez, has expressed an interest in the depleted south Kavala gas deposit in Greece’s north, expected to be developed as an underground natural gas storage facility.

Company officials were part of a delegation accompanying president Emmanuel Macron on his official visit in September.

Engie officials have already gained an understanding of the Greek energy market as the company maintains interests in independent energy firm Heron, active in electricity generation and supply as well as trade in the natural gas market.

The Engie team apparently singled out the prospective underground natural gas storage facility, sought additional information and, more recently, reiterated their interest.

The Greek government, especially its energy ministry, appears determined to utilize the depleted south Kavala gas deposit in the country’s north as an underground natural gas storage facility.

Its feasibility is strengthened by the prospective Greek-Bulgarian IGB gas system interconnector and extensions to Serbia and Romania.

Engie, a leading player in Europe’s natural gas market, is obviously interested in increasing its role in southeast Europe’s gas market. The French firm controls Europe’s biggest natural gas distribution network, is the continent’s biggest importer, owns Europe’s biggest storage facilities, and supplies 105 billion cubic meters of natural gas per year.

The south Kavala project is seen as essential in Greece’s overall effort to reinforce energy supply security. It would also take further an ambitious plan to establish the country as a regional energy hub.

At present, the government is examining three options. The first is to grant the underground natural gas storage facility’s development to Energean Oil & Gas, holder of the deposit’s exploitation rights, renewed just days ago.

The second option being looked at is to incorporate the underground facility into the national natural gas system with DESFA, the natural gas grid operator, as operator of the investment and its utilization.

The third alternative being considered is to classify the prospective natural gas storage facility as an independent unit and stage an international tender offering its development and exploitation rights.

TAIPED, the state privatization fund, now in control of this specific asset, the energy ministry and RAE, the Regulatory Authority for Energy, are expected to reach a decision within the next few weeks, according to the energy ministry’s secretary general Mihalis Veriopoulos.

The project has been reincluded on the EU’s Projects of Common Interest (PCI) list after being removed two years ago, indicating a wider European interest in the project.