RAE, the Regulatory Authority for Energy, has approved guidelines specifying how the development cost will be shared for an underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, thereby settling one of the main regulatory issues that remained for an ongoing tender offering use, development and operation of the facility.

According to the RAE decision, 50 percent of the project’s cost will be passed on to gas network users. As for the other 50 percent, 35 percent is expected to be covered through EU funding, assuming the project is included on the EU’s Projects of Common Interest (PCI) list, while the remaining 15 percent will be taken on by the eventual investor.

In the event that the UGS is excluded from the EU’s PCI list, the Greek State will consider becoming a project partner so that the cost for gas network users is not increased.

DESFA-GEK TERNA and Energean Oil & Gas have advanced to the second round of a project tender staged by privatization fund TAIPED.

The almost depleted natural gas field, where the UGS will be developed, is located 18 km south of the main coastline of Kavala, roughly 6 km west of the island Thasos, at a sea depth of 52 meters.