The government appears to be moving ahead with a plan to develop a depleted south Kavala gas deposit in the country’s north as an underground natural gas storage facility.
Last Friday, in the latest development, energy minister Giorgos Stathakis signed an agreement to extend the project’s license until November 23, 2018.
Early this month EDEY, the Greek Hydrocarbon Management Company, expressed its support for the project’s development in a statement forwarded to the energy ministry.
The Kavala project has been placed under the jurisdiction of TAIPED, the state privatization fund, since 2011. However, the fund has yet to make any serious moves on this front. Instead, the government believes the depleted gas deposit possesses major utilization potential.
Last February, the energy ministry assembled a working group headed by secretary general Mihalis Veriopoulos to examine natural gas storage solutions following problems encountered in Greece last winter. The depleted gas deposit in south Kavala is one solution under consideration.
This project’s development has also received backing from Energean Oil & Gas, which along with its subsidiary Kavala Oil, holds an exploitation license for the depleted south Kavala deposit.
On numerous occasions, Energean has requested to utilize the former deposit as a storage facility through a conversion of its current exploitation license into a natural gas storage license.
Kavala Oil’s managing director Dimitris Gontikas, speaking at a recent Capital Vision conference, noted that the conversion plan represents a key part of Greece’s natural gas supply security plan and would also reinforce the country’s geopolitical role, as is intended by the government.
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. Subsequently, new feasibility studies are expected.
Older studies had estimated the project would cost approximately 400 million euros to develop, but this figure is expected to be considerably lower as a result of progress made in this domain.