Snam not interested in DESFA sale without Socar as a partner

Italian operator Snam wants to be a part of the DESFA (natural gas grid operator) privatization, but only if Azerbaijani energy company Socar stays in the arrangement offering 66 percent of the operator, sources have informed on the unfinished sale’s latest developments.

Officials at Socar, whose letter of guarantee for the DESFA sale expires at the end of this month, are pressing to meet with Prime Minister Alexis Tsipras.

According to energypress sources, a Snam representative who met yesterday with Greek energy ministry officials, reiterated the Italian operator’s stance, noting the operator has signed a preliminary agreement with Socar for the acquisition of between 17 and 25 percent of DESFA and intends to honor this commitment.

Socar, the winning bidder of a tender offering a 66 percent stake of DESFA, needs to surrender at least 17 percent of DESFA and assume a minority role, following European Commision intervention.

An announcement released by Greece’s energy ministry yesterday, following the meeting with the Snam official, made no reference to the Italian company’s intentions.

Keen to exhaust the remaining time period for a solution, the Greek government intends to  remain available for Azerbaijani officials. However, Socar officials will probably be received by the Minister of State Alekos Flambouraris, not the prime minister, as they have requested.

A date for the meeting has yet to be set, but both sides would like to meet as soon as possible in a bid to break the ice that resulted from a recent measure implemented by energy minister Panos Skourletis. It limits the operator’s network usage hikes and, therefore, revenue potential, as a means of protecting consumers.

Highlighting the communication breakdown, Athens unsuccessfully sought to contact Azerbaijani officials and inform of DESFA managing director Konstantinos Xifaras’s resignation prior to the move’s official announcement this week. However, they could not be reeached.

Socar contends DESFA’s market value has been affected by the energy minister’s recent revenue-restricting measure. The original sale price was set at 400 million euros for a 66 percent stake. The Azerbaijani company, backed by Snam, wants a compromise deal as a result of the DESFA measure. Otherwise, the sale appears doomed. Athens yesterday reiterated that it will neither budge from the price already set nor take back the revenue-limiting measure.