A joint ministerial decision concerning the operating regulatory framework for a prospective underground gas storage facility in the offshore South Kavala region has been held back by a latest administrative obstacle.

The decision, prepared by the energy ministry, has been put on hold until legal details are resolved, sources noted.

Despite the emergence of this latest hurdle, the ministry will soon be in a position to clear it, energy minister Costis Hatzidakis announced yesterday.

Meanwhile, RAE, the Regulatory Authority for Energy, has begun preparing general guidelines to determine pricing policy, adjustable earnings, minimum WACC levels, as well as compulsory vacancy levels that will need to be maintained by the project’s developer as support for national energy security.

Once the joint ministerial decision has been published, RAE will have three months to complete the  framework so that bidders will have its details when the time comes to submit binding offers.

TAIPED, the privatization fund, plans to stage a tender offering the underground gas storage facility within the first six months of 2020.

To be developed at a depleted natural gas field, the underground gas storage facility will offer a storage capacity of at least 360 million cubic meters.

The investment’s cost is estimated between 300 and 400 million euros. France’s Engie, Energean Oil & Gas and GEK-Terna have formed a three-member consortium named Storengy in anticipation of the tender.

DESFA, the gas grid operator, is also expected to participate in the tender.

A total of 642 underground gas storage facilities offering an overall capacity of 333 bcm, approximately 11 percent of global gas consumption, operate around the world. In the EU, 126 such facilities offer a total gas storage capacity of about 80 bcm.