Public gas grid operator Bulgartransgaz said on Monday that it signed an agreement to receive a 78 million euro ($82.5 million) European Union grant to co-finance the project for expansion of Bulgaria's Chiren underground gas storage (UGS) facility.
The agreement was formalised between Bulgartransgaz and the European Climate, Infrastructure and Environment Executive Agency (CINEA) in Luxembourg, on the sidelines of the ongoing meeting of transport, telecommunications and energy ministers from the EU, the company said in a statement.
The expansion of Chiren, Bulgaria's sole natural gas storage facility, aims to increase its storage capacity to 1 billion cu m while the withdrawal and injection capacities will rise to between 8 million and 10 million cu m per day, Bulgartransgaz said. The current gas storage capacity of the site is approximately 550 million cu m.
The project is important as complementary to the development of liquefied natural gas (LNG) terminals in the region, including the one in Alexandroupolis, Greece where Bulgartransgaz owns 20% of the share capital of project company Gastrade, Bulgartransgaz CEO Vladimir Malinov said. There is also significant opportunity for trading the quantities destined for extraction and injection on the Balkan Gas Hub platform.
The grant, which was agreed in January, will finance above-ground and drill facilities as well as a 45-km pipeline.
The gradual commissioning of the upgraded infrastructure is expected to complete by the end of 2024, Bulgartransgaz added.
The European Commission has already highlighted the project's significance for security of gas supply in the region of Southeast Europe (SEE), as well as its contribution to achieving decarbonisation and advancing the transition to clean energy.
In March, Bulgartransgaz launched tenders for two contracts worth an estimated 300.8 million levs ($162.6 million/153.8 million euro) in total for above-ground facilities as well as 133.7 million levs for the drilling and construction of new wells at Chiren. The above-ground infrastructure project hit a stumbling block in April when Bulgaria's competition authority suspended it after ruling in favour of a complaint lodged by local company Nova Gas 2021.