The Greek government envisages the conversion of a depleted natural gas deposit in the Gulf of Kavala, northern Greece, into an underground natural gas storage facility as part of a wider effort to bolster the country’s geopolitical role and establish it as a regional energy hub.
Speaking in Greek Parliament, Environment and Energy Minister Panos Skourletis criticized TAIPED, the State Privatization Fund, into which this national asset has been transferred, for “not having shown any interest all these years, despite the fact that natural gas storage stands as a highly significant issue throughout Europe and such spaces are greatly sought after.”
According to energypress sources, the environment and energy ministry is prepared to press ahead with proceedings to utilize the space once a work group assembled by the ministry to study the prospect has completed its work, even if this means regaining control of the asset from TAIPED.
Even the former energy minister Yiannis Maniatis, who held the portfolio under Greece’s pre-Syriza administration and had authorized the depleted gas deposit’s transfer to TAIPED during his tenure, has appeared dissatisfied by the lack of progress.
Natural gas storage needs in the wider region are expected to significantly increase once deposits in Israel and Cyprus are fully developed for production. The scheduled launch of the TAP (Trans Adriatic Pipeline) project in 2020 also elevates the role to be played by the underground natural gas storage facility as no other storage facility exists along the pipeline’s route. Just one natural gas storage facility operates in the wider area, in Chiren, Bulgaria, not on the TAP route, but its storage and supply capacities are limited.
The Europea Union, seeking to bolster supply security, supports the development of such projects. The Gulf of Kavala deposit’s prospective conversion into an underground natural gas storage facility was initially classified as a Project of Common Interest (PCI), a status ensuring EU funding, but was removed from the list last year as the project had remained stagnant.
The depleted natural gas deposit is controlled by Energean Oil & Gas, which holds licenses for deposits in the wider area. The company’s operating license was granted a further two-year extension last November. Otherwise, the Greek State would have needed to find funds to protect and maintain the facility.
The prospect of converting the depleted natural gas deposit in the Gulf of Kavala into an underground natural gas storage facility had been examined in 2011 by Energean – according to company officials it remains interested – the Greek State, as well as DESFA, the natural gas grid operator. At the end of 2011, the national asset was transferred to TAIPED for privatization through an international tender. However, this procedure never got off the ground despite an interest expressed by Edison and Energean.
The underground natural gas storage facility’s development would offer a capacity of roughly 500 million cubic meters, which would greatly upgrade energy security in Greece.