UNDERGROUND GAS STORAGE

We are contributing to secure the reliability of gas supplies to consumers in Greece, irrespective of the temperature, season, or geopolitical circumstances.

Natural gas storage, specifically Underground Gas Storage (UGS), is integral to ensuring security of supply. The storage system levels off fluctuations between gas supply and demand, which is of particular relevance during the winter season when demand for gas is at its highest. UGS also plays an essential role in minimising the need to import more gas in times of high demand while contributing to absorb supply shocks. In 2022, and as a result of a prolonged period of volatile and high energy prices, the European Commission adopted the Gas Storage Regulation (EU/2022/1032), making gas storage facilities critical infrastructure.

In April 2022, HEREMA was appointed as the licensing authority, on behalf of the Hellenic state, for the exploration and underground storage of gases and liquids such as natural gas and hydrogen (Law 4920/2022, Government Gazette A '74/ 15.04.2022).

WHAT IS UGS TECHNOLOGY?

UGS is a key component of the natural gas delivery system, which consists in storing large volumes of gas in underground geological formations. Underground facilities are typically one of three types: Depleted oil and gas reservoirs, deep saline aquifers, and salt cavern formations. In addition to natural gas, other substances like hydrogen, CO2, or nitrogen can be stored in the subsurface.

Leveling gas supply and demand during periods of peak gas demand (winter period).

Optimisation of the national gas industry.

Enabling a better negotiating position for the country with respect to gas imports.

Strengthening energy security by ensuring the availability of strategic gas reserves.

HEREMA’S MAIN RESPONSIBILITIES

As the licensing authority for UGS projects within the Greek territory, HEREMA’s responsibilities include:

Reviewing and evaluating UGS applications for licensing approval ensuring all technical, economic, environmental, and legal conditions are duly satisfied.

Evaluating potential subsurface storage locations to assess potential storage structures leveraging existing and up-to-date geological data.

Guiding potential applicants through the licensing process.

Collaborating and engaging with project developers for the successful completion of UGS projects.

THE SOUTH KAVALA UGS PROJECT

Greece’s first UGS project aims to convert a depleted natural gas field into a gas storage facility, supporting major gas pipelines.

OVERVIEW

Located 11 kilometers south of the Prinos oil field at a depth of 1,700 meters, the South Kavala gas field is considered an ideal reservoir for the development of a UGS facility. The current operator of the concession, Energean Oil & Gas S.A., holds an exploration license for the area that will remain valid until November 2022.

As the first underground gas storage project in Greece, this is considered a highly strategic endeavor that will enhance security of energy supply at both a domestic and regional level, minimising dependencies on westbound pipelines. The South Kavala UGS project is particularly important as the country progresses with the transformation of its energy system to a low-carbon model through coal-to-gas switching.

In October 2011, the Interministerial Committee for Restructuring and Privatizations decided to transfer all rights for the concession of the South Kavala field as a UGS facility to Greece’s privatization fund, HRADF. The tender is currently ongoing.

ADDITIONAL DETAILS

Location:

The South Kavala gas field is located in northern Greece, west of Thasos Island in the Gulf of Kavala. It covers an area of 5 km2.

Estimated investment:

€ 400 million

Strategy:

According to preliminary technical studies, the South Kavala UGS would contain a working gas volume of 530 mn Nm3 and operate two cycles per year at a peak withdrawal rate of 9 mn Nm3/day.

Connection to national gas system:

Via pipeline

UNDERGROUND GAS STORAGE