Greece is set to agree the sale of its natural gas grid operator DESFA to Azeri state energy company SOCAR, a senior official directly involved in the talks said yesterday (18 June). The deal appears to raise the chances that the Trans-Adriatic Pipeline (TAP) will win its bid for Azeri gas, against its competitor Nabucco.
SOCAR has improved its offer to buy a 66% stake in the company to €400 million, a price that Greece's privatisation agency HRADF finds satisfying, the official said.
"The privatisation agency is very pleased, it's basically a done deal," the official told Reuters on condition of anonymity. HRADF may formally approve the sale as soon as on Thursday at its next board meeting.
A 35%t stake on sale is owned by refiner Hellenic Petroleum and the remaining 31% by Greece. This means that the debt-laden country would get about €188 million of the sale's total proceeds.
SOCAR was the sole bidder to buy DESFA after Russian energy company Sintez and Greek-Czech group PPF-Terna dropped out of the bidding earlier this month.
Greek energy officials have already said they were keen to seal the deal, which is part of the country's privatisation plan under its bailout from the European Union and the International Monetary Fund.
Athens also expects the DESFA sale to raise the chances of the Trans-Adriatic Pipeline (TAP), one of the two rival natural gas pipeline projects vying to become a conduit for Azeri gas to Western Europe (see background).
SOCAR already said earlier this week it wanted to increase its market share in Greek gas distribution from its current level of 17% and to deliver gas to the country from the major Shah Deniz field off Azerbaijan in the Caspian Sea.
DESFA is a wholly owned subsidiary of state-run natural gas company DEPA, whose privatisation failed earlier this month in an embarrassing setback to Greece's bailout plan.
Greece failed to attract any buyers for its natural gas company DEPA by the 10 June deadline for binding bids, in a major setback to the country's ambitious privatisation programme. Gazprom, the frontrunner to buy DEPA, withdrew at the final stage of the sale before a deadline to submit binding bids expired.
Gazprom said it was worried about DEPA's financial position, but Greece said the Russian firm may have been discouraged by fears that the EU would impose stringent conditions.
The DEPA failure came as a surprise to most: Greece had tried hard to woo Gazprom.
Athens had offered assurances that DEPA's austerity-hit customers would settle part of their arrears, and that Gazprom would not have to deposit part of the purchase price as a guarantee pending European Union approval.