Revithoussa and Italy will share the necessary gas reserves, according to the updated Preventive Action Plan for the security of gas supply in Greece, which has been prepared by the Energy Regulatory Authority (RAE) and received pre-approval from the Commission. The aim is to enhance consumer protection in the event of significant disruptions in demand and/or supply of natural gas.

In particular, it is proposed that the new floating storage unit (FSU) of the Liquefied Natural Gas (LNG) facility installed in June in Revithoussa (FSU – Floating Storage Unit) will “accommodate” 0.57 terawatt hours (TWh) of strategic reserves for electricity generation, while only 1.14 TWh of commercial gas suppliers’ reserves will be kept in a storage facility in Italy. However, this proposal is not binding as there is also the possibility of storage in other infrastructures, which can be proposed by the obligated parties.

Commercial stocks in Italy

The obligation to maintain gas stocks is imposed on holders of supply licences to final customers who have injected gas into the National Gas Transmission System in the previous five years and are users (commercial storage). Obligated suppliers must reserve space and store gas in underground storage facilities in neighbouring Member States by 1 November 2022.

The withdrawal and use of the stored quantity will be available to the obligated parties and to the Greek market (at the Trading Platform) under any circumstances (even if the adverse scenario of gas supply disruption does not materialise) during the months November 2022 – March 2023. During this period, the gas storage obligors in Italy will “import” the gas they have stored in the NGS, at the Nea Mesimbria Entry Point, through a virtual reverse flow from the TAP pipeline.  The total amount of storage is identified at 1.14 TWh.

The cost

The amount of stock each supplier is required to maintain separately in the storage facilities in Italy will be determined according to its share of imports in the Greek market and the storage capacity in the neighbouring country.  The estimated costs for transportation and storage range between  8 -17 million euros and the obligors will be compensated through the Security Supply Fee (SSS – to be collected by thw National Natural Gas System Operator (DESFA) from all users per unit of gas received from the National Gas Transmission System, which will be recovered from gas customers). The gas supply cost will not be compensated, as it will be used by suppliers to meet their customers’ needs during winter .

However, due to the early supply of gas and the costs incurred because of it, a Contracts for Differences is created, both to cover the suppliers liable in case the commercial price of gas at the time of withdrawal (Trading Platform) compared to the supply price during the injection period is lower, and to protect consumers from any particularly high prices during the withdrawal period.

If a supplier chooses to store gas in a storage facility in another country (outside Italy) and if they ensure uninterrupted capacity for they daily import of gas in Greece, they will be compensated as long as the costs do not exceed those in Italy, unless it proves that it is impossible to store gas in Italy, in which case they will be compensated with the additional costs.

Strategic stocks in Revithoussa

Any holder of a natural gas-fuelled electricity generation licence who has chosen in case of an emergency to maintain a natural gas reserve in a storage facility rather than the possibility of burning an alternative fuel (and maintaining the relevant diesel reserve) shall be obliged to:

  • Maintain sufficient gas reserves in a storage facility to ensure uninterrupted operation of the power plant for at least five days at full load.
  • Ensure that the required liquid fuel supply systems and diesel oil storage tanks are installed with sufficient capacity to ensure uninterrupted operation of the power plant for at least 24 hours at full load.

In particular, the owners of gas-fired power plants that have chosen to maintain a gas reserve at a storage facility must proceed with all necessary procedures to maintain a gas reserve at the LNG facility in Revithoussa and in particular to store it before 1 November 2022, enhancing the availability of gas, in case of disruption of Russian gas supply, up to 570,000 MWh.

The 1st of November as a milestone date

According to the Preventive Action Plan of RAE, in the absence of an underground gas storage facility in Greece, it is considered more economical and readily available for power generators to use the Revithoussa infrastructure to maintain reserves during winter. By analogy with the obligation imposed on generators who have opted for the use of alternative fuel, the reserve for each obligated generator is determined taking into account 16 hours of operation at full load for five days.

According to RAE, it is considered that there is the necessary available storage space in Revithoussa, as the FSU has not been currently utilised since June when it was installed, nor have slots been allocated or scheduled to fill it to date. The filling of Revithoussa with the FSU should be completed by 1 November 2022 or by the start of commercial operation of a new power plant.

During the 5-month maintenance of the reserve and, while the gas system is operating under normal conditions, if required, it will be possible to gasify part or all of the safety reserve to create sufficient storage space for an upcoming new load of an infrastructure user.

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