The energy ministry does not intend to make any changes to conditions and price levels concerning the ongoing privatization effort for DESFA, Greece’s natural gas grid operator, ministry officials informed a representative of Italian operator Snam at a meeting in Athens today.
Snam appears to have agreed to take on a 17 percent of DESFA from Azerbaijani energy firm Socar, ordered by Brussels to surrender this stake for a reduction to no more than 49 percent. Socar emerged as the winning bidder for a 66 percent share of DESFA in 2013 but the sale has remained unfinished.
RAE, the Regulatory Authority for Energy, is close to determining and setting a price for DESFA’s (natural gas grid operator) network usage fees, to be applied by the operator from here on. A decision is expected any day now.
According to sources, energy ministry officials, clarified, during today’s meeting, that the privatization effort needs to comply with the European Commission demand that would restrict Socar’s role as a minority shareholder.
It was also pointed out that the sale price of 400 million euros set for a 66 percent stake of DESFA will remain unchanged. Any price revision would annul the current tender. Socar contends the amount is overpriced. The Azerbaijani company believes DESFA’s market value has dropped as a result of a recent revenue-restricting measure imposed on the operator by the ministry to protect consumers from hefty price hikes.
The ministry officials also explained that DESFA’s price hike-restricting measure will remain intact.
In recent months, the energy ministry – fearing a withdrawal by Socar from the DESFA sale as a result of the ministry’s measure, which comes as an addition to the setback caused by the intervention from Brussels – has encouraged Snam to consider acquiring a greater DESFA stake. The European Commission, which has always viewed Socar’s entry with hesitation, maintains a favorable outlook on a bolstered Snam role at DESFA.
Yesterday’s resignation by DESFA’s managing director Konstantinos Xifaras, requested by energy minister Panos Skourletis, comes with little negotiating time remaining in search of a deal. Socar’s letter of guarantee, which has been extended several times over the prolonged DESFA sale effort, expires at the end of this month. A new tender will need to be launched if the letter of guarantee expires without a result.