EC approves €16 million to support expansion of natural gas storage facility in Chiren

The European Commission has approved, under EU State aid rules, a €16 million Bulgarian measure to support the expansion of Bulgartranstaz's natural gas storage facility in Chiren, EC said on August 8.

Bulgartranstaz decided to invest approximately €285 million to expand the capacity of its natural gas storage plant in Chiren, which is the only natural gas storage facility in Bulgaria. The storage capacity of the facility is expected to increase from 550 million to 1 billion cubic meters. Moreover, the capacities for withdrawal and injection of natural gas in the grid will also be increased.

Bulgaria notified to the Commission its plans to support Bulgartransgaz's investment with a nine-year €16 million public guarantee on the loan to finance the measure. The aim is to ensure security of gas supply, enhance competition in the gas market, also thanks to a greater integration of the plant in the network, and encourage gas trade in the region.

The Chiren storage expansion is a project of common interest (‘PCI') included in the Fifth list of PCIs. PCIs aim at completing the European internal energy market in order to help the EU achieve its energy and climate policy objectives.

The Commission assessed the scheme under Article 107(3)(c) TFEU, which allows EU countries to support the development of certain economic activities under certain conditions, and the Guidelines on State aid for climate, environmental protection and energy (‘CEEAG'). The Commission found that the Bulgarian scheme is necessary and appropriate to facilitate Bulgartransgaz's investment in its natural gas storage facility. Furthermore, the Commission concluded that the scheme is proportionate, as the aid will be limited to the minimum necessary to ensure the investment in the plant, 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.

The non-confidential version of the decision will be made available under the number SA.106120 in the State aid register on the Commission's competition website once any confidentiality issues have been resolved.