Bulgartransgaz and the European Climate, Infrastructure and Environment Agency sign grant agreement for expansion of UGS Chiren

Bulgartransgaz EAD and the European Executive Agency for Climate, Infrastructure and Environment (CINEA) have signed the grant agreement to finance the expansion of Chiren UGS, the gas company announced.

The signing of the agreement was marked at an official ceremony in Luxembourg on 27 June at the EU Transport, Telecommunications and Energy Council. The Executive Director of Bulgartransgaz EAD Vladimir Malinov received the agreement from the EU Energy Commissioner Kadri Simson.

In 2021, the European Commission included the extension of the Chiren underground gas storage facility in the 5th list of projects of common interest to the EU, and on 27 January 2022 it announced that an agreement had been reached among Member States on funding under the Connecting Europe Facility. (CEF).

The expansion of Chiren UGS is one of the five approved energy projects and the only one in the field of natural gas for EU funding. According to the grant agreement for the implementation of the project, co-financing in the amount of up to about 78 million euros under CEF is granted.

The project aims to increase the natural gas storage capacity to 1 billion m3 and the daily production and injection capacities to 8-10 million cubic meters per day (m3 / d).

The Executive Director of Bulgartransgaz Vladimir Malinov stressed that the expansion of UGS Chiren is in synergy with the LNG terminals in the region, incl. the terminal in Alexandroupolis, in which Bulgartransgaz participates with 20% of the share capital of the project company Gastrade SA

According to the executive director of Bulgartransgaz EAD, the combination of the project with the significant transmission capacities at the connection points with the neighboring countries determines the importance of the storage in regional aspect and the potential for growth of gas transmission and storage services on a purely commercial basis. The possibility for trading the quantities for extraction and injection on the platform of Gas Hub Balkan EAD is also essential.

The target parameters for the expansion of the repository will be achieved through the construction of above-ground facilities, boreholes and a gas pipeline with a length of about 45 km.

The chosen approach for realization of the project for expansion of the repository allows its normal operation during the whole 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's enlargement is of paramount 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 extraction 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 pan-European priorities for diversification of natural gas sources, ensuring security of supply, providing additional flexibility, increasing market integration and stimulating competition.

The Chiren enlargement project is in line with the European Commission's policy on increasing energy sustainability, presented through the REPowerEU plan.