This work focuses on the circulating current control of a STAtic synchronous COMpensator (STATCOM) based on Modular Multilevel Converter (MMC). Two circulating current estimation strategies are analyzed, with focus on the converter performance improvement The conventional method to estimated the circulating current has been improved using a Second Order Generalized Integrator (SOGI) structure. The proposed strategy eliminates the third harmonic component from the circulating current through a SOGI filter. Simulated and experimental results compare both classical and proposed strategy in terms of reduction in the circulating current, dynamic behavior during reference changes and reduction in the STATCOM losses.