State privatization fund TAIPED intends to commence a sale procedure in 2019 for a depleted natural gas field in northern’s Greece’s offshore South Kavala region to be utilized as an underground gas storage facility, according to fund sources, who view the asset as pivotal infrastructure for the country’s development into a regional energy hub.

Regulatory and technical matters concerning the asset’s prospective utilization still need to be worked on before the privatization fund stages a tender for this UGS next year.

Also, the energy ministry is preparing a necessary ministerial decision to classify the asset as an independent natural gas system.

This depleted natural gas field belongs to Greek State, while the Energean Oil & Gas company holds South Kavala’s exploration and production rights. These been extended over the past few years as a result of the Greek State’s indecisiveness on how to go about utilizing the depleted Kavala gas field. A further one-year extension, with an option for an additional year, is expected.

About a year ago, an energy ministry committee advised energy minister Giorgos Stathakis to pursue converting the depleted field into a UGS, a common practice in other EU member states, where a total of 162 such facilities with an overall storage capacity of 100 billion cubic meters have been developed.

The South Kavala asset could offer storage capacity of 950 million cubic meters following a needed investment estimated at between 250 and 280 million euros.

The asset had lost its PCI status before regaining it as a result of its potential.

Consulting firm PwC and the Rokas Law Firm have been hired for the privatization procedure.