Socar president Rovnag Abdullayev is scheduled to travel to Athens next week for a meeting with Prime Minister Alexis Tsipras following the Azerbaijani state energy company’s insistence for talks with Greece’s head of state, and no subordinates, in an effort to clinch a last-minute privatization deal for DESFA, the natural gas grid operator. A letter of guarantee provided by Socar expires in one week, on September 30.
Though a date has yet to be set for the meeting as the Greek Prime Minister is currently in the US, a midweek session is most likely, energypress sources have informed.
Abdullayev confirmed the news of the pre-deadline meeting during comments offered to the Azerbaijani state news agency APA.
A recent revenue-limiting measure imposed on DESFA by the Greek energy ministry to protect consumers from hefty hikes has disgruntled Socar officials. Just days ago, RAE, the Regulatory Authority for Energy, staged a swift public consultation procedure for DESFA’s plan to increase natural gas transmission tariffs by 23.2 percent in 2017. Azerbaijaini officials had anticipated a 68 percent increase based on an older DESFA pricing formula, now abolished following initiatives taken by energy minister Panos Skourletis.
Small mutual concessions by the negotiating sides as well as Greek political commitment to Socar investments in Greece could possibly be enough to produce a last-minute agreement on the DESFA sale, a well-informed local pundit told energypress.
A network usage tariff hike of around 30 to 35 percent, rather than 23.2 percent, as well as reassurance from Athens on Socar being viewed as a strategic investor in Greece could suffice for an agreement.
The Socar boss’s willingness to travel to Athens suggests the Azerbaijani company remains interested in reaching an agreement, Greek government sources believe.
Should the two sides converge and reach an agreement, the DESFA stake to be acquired by Socar is expected to fall well below 49 percent. In this event, Italy’s Snam would take on between 30 and 35 percent of the Greek gas operator. Belgian operator Fluxys could also get involved.
Socar had emerged as the winning bidder of an international tender completed in 2013 for a 66 percent stake of DESFA at a price of 400 million euros. The European Commission then intervened and demanded that the Azerbaijani company surrender at least 17 percent to a certified European operator, which would leave Socar with no more than 49 percent of DESFA. Snam, Fluxys and other operators emerged as prospective buyers of Socar’s surrendered stake.
Socar and Snam hold 20 percent stakes, with Fluxys holding 19 percent, in the TAP (Trans Adriatic Pipeline) consortium developing a natural gas pipeline to run across northern Greece, through Albania and across the Adriatic Sea to Italy. It will supply Azerbaijani natural gas to Europe.
Greek government officials are concerned that the DESFA sale issues could affect the TAP project’s progress, despite the multinational involvement in the pipeline’s development and lack of signs indicating any spillover.