The signing of the agreement was marked at an official ceremony in Luxembourg on 27 June within the framework of the EU Council "Transport, Telecommunications and Energy". The Executive Director of Bulgartransgaz EAD Vladimir Malinov received the agreement from the European Commissioner for Energy Ms Kadri Simson.
In 2021, the European Commission included the Chiren UGS expansion in the 5th list of projects of common European interest, and on 27 January 2022 it announced that an agreement had been reached among Member States on funding the project under the Connecting Europe Facility (CEF).
The Chiren UGS expansion was among the five approved energy projects and the only one in the field of natural gas selected for EU funding. According to the grant agreement for the implementation of the project, co-financing of up to about 78 million EUR is granted under CEF.
The project aims to increase the natural gas storage capacity to up to 1 bcm and the daily withdrawal and injection capacities to up to 8-10 mcm/d.
Mr. Malinov pointed out that the Chiren UGS expansion is in synergy with the LNG terminals in the region, including the terminal in Alexandroupolis, in which Bulgartransgaz participates with 20% of the share capital of the project company Gastrade S.A.
According to the Executive director of Bulgartransgaz EAD, the linking of the project with the significant transmission capacities at the interconnection points with the neighbouring countries determines the importance of the gas storage in regional aspect and the potential for growth of gas transmission and storage services on an entirely commercial basis. The opportunity for trading the quantities for withdrawal and injection on the platform of Balkan Gas Hub EAD is also essential.
The storage expansion target parameters will be achieved through the construction of above-ground facilities, wells and a gas pipeline with a length of approximately 45 km.
The selected approach for realization of the storage expansion project allows its normal operation during the entire period of the planned activities until the commissioning of the new infrastructure. The phased commissioning of the infrastructure is planned to be completed by the end of 2024.
Chiren UGS expansion is of uppermost importance not only because of its role as a source of gas in the event of a supply disruption. In this regard, the plans for dynamic development of the gas infrastructure in the region determine the need for the corresponding development and expansion of the Chiren UGS. The availability of sufficient storage capacity and therefore for gas withdrawal and injection is key to the successful market entry of alternative sources of natural gas, including LNG.
The new technical parameters of UGS Chiren will contribute to the implementation of key European priorities for diversification of natural gas sources, ensuring security of supply, providing additional flexibility, increasing market integration and stimulating competition.
The Chiren UGS expansion project is in line with the European Commission policy on increasing energy sustainability, presented through the REPowerEU plan.
