Russia's Gazprom Wednesday signed a deal with Czech oil and gas producer MND Group to build a new underground gas storage facility in Damborice, in the South Moravian region of the Czech Republic.
"The underground gas storage facility will have an active capacity of 448 million cubic meters and will be one of the largest facilities of its kind in the Czech Republic," Gazprom said in a statement.
Gazprom and MND Group are planning to start construction of the facility in 2014, and launch it in 2016. They will split investment in the project 50:50, and estimate costs to reach around $128 million, Gazprom said.
"Increasing the reliability of supplies of natural gas to Europe is our long-term strategy and expanding our capacity in terms of underground storage facilities is an important element of that," Gazprom deputy CEO Alexander Medvedev said, according to the company's statement.
Chairman of MND Group's board of directors Karel Komarek added in the statement that the companies are planning "new joint projects, not only in the Czech Republic, but also elsewhere in Europe and in the Russian Federation."
Gazprom supplied the Czech Republic with 7.28 billion cubic meters of gas in 2012.
