The Greek government is anxiously awaiting a response from Azerbaijani energy firm Socar to its slightly improved offer concerning the 66 percent privatization of DESFA, Greece’s natural gas grid operator, while also exploring alternative options should the procedure sink, a prospect the government does not wish but which is highly likely.

The deadline, determined by a letter of guarantee provided by Socar, expires later today.

According to energy ministry sources, Greece’s new proposal forwarded to Socar and Snam, the Italian firm which has joined Socar as a partner for the deal, improves the market value of DESFA and places emphasis on recoverable amounts concerning investments made between 2006 and 2015. It remains unclear whether the improvement has satisfied the prospective buyers and to what extent.

An answer is expected within the next few hours. Rumors which floated about late last night gave the DESFA sale attempt little hope, which is why the government is already preparing alternatives.

The long-running DESFA sale attempt’s failure would affect the government’s second-review bailout negotiations with the lenders. The DESFA sale is a pending issue from the bailout’s first review. Failure to privatize now would also harm the country’s credibility in the eyes of investors. The tender’s failure would also negatively impact Greece’s wider relations with Azerbaijan and a number of energy project prospects such as the TAP natural gas pipeline, now under construction. Both Socar and Snam hold stakes in the TAP consortium. In addition, the country’s privatizations revenue coffer would be deprived of 180 million euros, which is the Greek State’s share of the 400 million sale price. The other 220 million would end up at ELPE (Hellenic Petroleum).

To minimize the fallout of a failed sale attempt, the government will need to relaunch a new DESFA tender as soon as possible. Government officials are already exploring plans to once again offer a 66 percent stake of DESFA or, alternatively, retain 51 percent for the Greek State and offer a total of 49 percent to a strategic investor and investors via the bourse. This latter option is based on the sale plan currently being carried out for IPTO, the power grid operator.

According to sources, other prospective investors seem ready to surface should the tender be relaunched from scratch.

Belgian natural gas grid operator Fluxys, also a TAP project shareholder, is likely to emerge as a potential buyer in association with Romania’s Transgas. Last week, representatives of these two firms, accompanied by their respective ambassadors to Greece, appear to have held talks with officials at ELPE, selling its 35 percent stake of DESFA as part of the 66 percent on offer. Fluxys and Transgas are believed to be interested in acquiring a 30 percent share of DESFA if Greece fails to reach an agreement with Socar and Snam.

The recently appointed energy minister Giorgos Stathakis appears to favor keeping grid management under the Greek State’s control. He is expected to promote the option based on the aforementioned IPTO plan and seek to sell 49 percent of DESFA.

Prime Minister Alexis Tsipras will need to decide on the next step should the current DESFA sale attempt sink.