Bulgartransgaz signs 113 mln euro contract for Chiren gas storage expansion

The expansion of Chiren will allow the storage of 1 billion cubic metres (bcm) of natural gas, which covers about a third of Bulgaria's consumption, Bulgartransgaz said in a statement on Wednesday.

Works will involve the construction of 10 new high-throughput production wells and three observation wells, as well as 10 new pipelines connecting the production wells to the compressor station, Bulgartransgaz said.

Each of the new wells will be located on a site spanning an approximate area of ​​100 sq m after drilling.

To fund the expansion, Bulgartransgaz is receiving a 78 million euro ($85.1 million) grant from the EU's Connecting Europe Facility (CEF), with state-owned Bulgarian Energy Holding to provide 87 million levs.

Bulgartransgaz is still in negotiations with US financial institutions with the aim of securing additional funding, it added.

UGS Drilling Chiren, formerly Exalo Drilling Chiren, is made up of Bulgarian civil engineering group Glavbolgarstroy, its international subsidiary, and Bulgarian private company Gas Project Development. It was awarded the contract last month after the initial winner of the public tender, the Chiren Drilling 2022 consortium, abandoned the project. Chiren Drilling 2022, which involved Bulgarian companies Atomenergoremont and Ina Build, had submitted an offer priced at 198.85 million levs, according to information available from the public procurement register.

In March, Bulgartransgaz finalised the selection of contractors under all three tenders for the expansion of Chiren, including above-ground infrastructure and a 41-km pipeline to connect to the national gas grid at Butan.

(1 euro = 1.95583 levs)