The energy ministry is close to deciding on a business model for a prospective underground gas storage facility in the offshore South Kavala region, the objective being to ensure the investment’s sustainability without overburdening consumers.

Numerous alternatives have been examined so far but a model applied in France and Italy appears to be the most favored, energypress sources informed.

The content of an upcoming joint ministerial decision is now at a mature stage following efforts that have now lasted nearly two years, energy ministry officials noted.

The ministerial decision will determine the licensing, development and exploitation terms for the project, 30km south of Kavala, where a depleted natural gas field is planned to be converted into an underground gas storage facility.

Swift progress is needed as Greece will need to request EU financing for the project, on the PCI list, in 2020. If the request is delayed until 2021 then the available funds could be severely diminished and absorbed by other European PCI-status projects.

The underground gas storage facility is vital for Greece’s electricity grid given the anticipated increase of gas consumption to be prompted by the planned development of combined cycle power plants. Five market players, Mytilineos, Elpedison, GEK TERNA, Elval Halkor and Karatzis, have expressed interest to develop such units.

Privatization fund TAIPED will take over proceedings for a tender once the project’s business model has been decided. The investment is expected to reach between 300 and 400 million euros. Its storage capacity is estimated at between 360 and 720 cubic meters.

Greece is the only EU member without an underground gas storage facility. All other member states maintain facilities covering at least 20 percent of their annual gas consumption needs. Many more similar facilities are currently being planned around Europe.