DESFA-GEK TERNA and Energean Oil & Gas have advanced to the second-round, binding-offers stage of a tender offering use, development and operation of an underground natural gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala”, while China’s CMEC-MAISON GROUP failed to qualify, privatization fund TAIPED has announced in a statement.
Following the signing of confidentiality agreements, the two qualifiers will be granted access to the tender’s virtual data room, where financial and technical data will be uploaded for due diligence procedures.
However, much work lies ahead before this project matures to enable the submission of binding offers. A number of regulatory issues remain pending, officials monitoring developments have informed, describing the project as complex and highly technical.
Pending issues include determining the percentage of the UGS’s capacity to be regulated for pre-determined earnings, and the percentage of capacity whose earnings will be shaped by market forces. The regulatory period and WACC level also need to be decided and set.
Given these tasks, as well as obstacles raised by the pandemic, binding offers are not expected to be submitted any sooner than late-2021. The final stage of this tender appears most likely to take place early in 2022.