The EC approved EUR 16 million in financing for the expansion of the gas storage facility in Chiren

Energy / Bulgaria
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Photo source: Marinela Arabadzhieva / 3eNews

The European Commission approved a Bulgarian measure of 16 million euros to support the expansion of the natural gas storage facility in Chiren by Bulgartransgaz. The decision was made according to the EU state aid framework as Bulgartransgaz decided to invest around 285 million euros to expand the storage capacity. It is expected that after the modernization, its capacity will increase from 550 million to 1 billion cubic meters, according to the Commission's announcement from today. Such an investment will increase the injection and pumping capabilities of blue fuel from Chiren to levels sufficient to cover the daily winter gas consumption in Bulgaria.

Bulgaria notified the Commission of its plans to support the investments of "Bulgartransgaz" within 9 years with a loan with a public guarantee of 16 million euros. The aim is to guarantee security of gas supply, to support competition in the gas market, and also to promote gas trade in the region through greater integration of gas storage.

The expansion of the Chiren repository is a Project of Common Interest ("PCI") included in the Commission's Fifth Schedule. These common projects aim to complete the European internal energy market to help the EU achieve its energy and climate policy objectives. In particular, Greece has so far announced a serious interest in storing blue fuel for Chiren.

The Commission assessed the scheme under Article 107(3)(c) TFEU, which allows Member States to support the development of certain economic activities under certain conditions, and the Climate, Environment and Energy State Aid Guidelines ('CEEAG'). The Commission found that the Bulgarian scheme was necessary and appropriate to facilitate Bulgartransgaz's investment in its natural gas storage facility.

The Commission also concluded that the scheme is proportionate as the aid will be limited to the minimum necessary to secure the investment in the gas storage facility and will not have undue negative effects on competition and trade in the EU. On this basis, the Commission approved the Bulgarian scheme under EU state aid rules.

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