Greece’s energy ministry and Azeri state-run energy company Socar, seeking to finalize a deal for the latter’s acquisition of an equity share in DESFA, the Greek gas grid operator, are currently locked in risky negotiations over the operator’s pricing policy regulations, especially tariff prices for services, which could derail the sale process.

As the winning bidder of an international tender that ended in 2013, Socar had initially agreed to buy a 66 percent share of DESFA but must now surrender at least 17 percent to third parties following European Commission intervention, presumably over security and competition concerns.

Despite not appearing to dispute the fact that a deal has been reached with Socar, Greece’s energy ministry has asked the Azeri company for a reassessment, by both sides, of existing data and terms determining DESFA’s network usage fees. The energy ministry believes the initial agreement will lead to considerable price hikes that cannot be handled by the Greek economy in its current frail condition.

According to energypress sources, Greece’s energy minister Panos Skourletis and Socar officials met a fortnight ago but failed to reach any agreement.

The Azeri officials did not accept any revisions to the terms and data that led Socar to offer 400 million euros for a 66 percent of DESFA back in 2012. The Socar officials, at the recent meeting, also indicated that the deal could be scrapped if any changes are made.

The developments will largely depend on a ruling to be delivered by RAE, the Regulatory Authority for Energy, which is expected to convene in a few weeks with a full seven-member board after having been left without executive powers for months as a result of four vacancies on the board. The authority is expected to examine the DESFA tariffs issue and decide.

RAE’s task will be a delicate one. Based on existing pricing regulations and various other data to be submitted by DESFA, it is considered certain that the authority will need to proceed with major network fee hikes that could reach as much as 50 percent, energypress sources have informed. However, on the other hand, one of RAE’s roles is to protect energy consumers, especially during times of recession. It is believed that RAE will seriously consider the prospect of revising the pricing policy regulations that currently apply for DESFA. This direction is being supported by the energy ministry, but it remains to be seen how Socar could respond.

Socar had estimated a return on investment of 11 percent per year based on the deal’s figures in 2012.

No investment interest had been expressed by third parties in the first half of 2015 for the 17 percent of DESFA that Socar will need to surrender. However, Italy’s Snam and Belgian-Spanish team Fluxys-Enagas expressed significant interest following the third Greek bailout deal, signed last August.