Azeri energy company Socar, which needs to reduce a 66 percent share it had agreed to buy in DESFA, Greece’s natural gas grid operator, to a maximum of 49 percent following European Commission intervention, is expected to safeguard its prospective European gas market interests when it chooses alternative buyers for its surrendered stake in the operator.
Socar is currently waiting for due diligence procedures being conducted by the potential additional buyers of stakes in DESFA to be completed by the end of January before the sale process heads towards finalization.
Planning to supply natural gas to the heart of Europe, Socar is likely to place precedence on this prospect over the amounts to be offered by buyers for the surrendered DESFA stake. Socar will strive to satisfy all potential buyers as a means of promoting its future gas sales in Europe as widely as possible.
Fluxys-Enagas, representing Belgium and Spain, and Italy’s Snam, are currently making their way through DESFA due diligence procedures.
Socar is increasingly likely to offer DESFA stakes to all potential bidders and, as a result, may increase the portion it will surrender from 17 percent to 25 percent, it is believed.
All potential bidders hold stakes in the TAP (Trans Adriatic Pipeline) consortium to develop a natural gas pipeline for supply of Azeri natural gas to Europe. Greece represents part of the route across to Italy. Italy’s Snam recently acquired a 20 percent stake in the TAP consortium from Norway’s Statoil for 208 million euros. Fluxys and Enagas maintain respective stakes of 19 percent and 16 percent in the TAP project.
Certain shareholders possessing stakes in the companies expected to make offers for a slice of DESFA have expressed reservations about investing in Greece and the risks entailed. For example, the prospect has caused considerable friction among shareholders at Fluxys. Besides Canadian shareholder Caisse de depot et placement du Quebec, which holds a 20 percent stake in Fluxys, negative opinions on investing in Greece have also been expressed by a number of state companies, represented through Publigas, which controls 77.7 percent of Fluxys. A new consortium, to include the participation of Publigas members and the investment fund FPIM, holder of a 2.1 percent stake in Fluxys, may need to be established to overcome these Greece-related objections.
Alternatively, Fluxys may end up buying a reduced stake of between 8 and 10 percent of DESFA as a gesture to appease its concerned shareholders. Snam could then acquire a stake of around 15 percent.
On a more general note, the Belgian, Spanish and Italian companies are all keen to expand their presence in the Greek market as they all hold shares in the TAP consortium. Small stakes in the country’s gas networks offered by DESFA would help bolster their standing here.