Major DEPA retail role, through EPA Attiki, supported locally

The leadership at the environment and energy ministry is insisting on a dominant role for DEPA, the Public Gas Corporation, in the retail gas firm EPA Attiki, serving the wider Athens area, and would settle for the gas utility taking on a minority role in EPA Thessaly-Thessaloniki, according to sources.

This position was apparently stressed during a meeting at the energy ministry yesterday. Officials representing DEPA, TAIPED, the state privatization fund, and ELPE, Hellenic Petroleum, which holds 35 percent stakes in DEPA and DESFA, the natural gas grid operator, all took part in the session.

Greece needs to deliver a gas market reforms road map by the end of the year, according to a term included in the revised bailout, following a request by the lenders, its aim being to remove factors not promoting competition. The future role of DEPA, currently omnipresent, is a key part of the road map.

The lenders have called for DEPA’s full withdrawal from Greece’s retail gas market but, as was indicated at yesterday’s meeting, the government is determined to maintain a commanding role for the gas utility through one of the two EPA companies. DEPA currently holds 51 percent shares in EPA Attiki and EPA Thessaly-Thessaloniki, while Shell and ENI are partners with respective stakes of 49 percent.

DEPA needs to reach agreements with its two EPA partners. According to sources, the gas utility is close to reaching a deal with ENI that would provide the Italian company with part of DEPA’s 51 percent in EPA Thessaly-Thessaloniki. The sources added that DEPA appears prepared to accept being a minor shareholder in EPA Thessaly-Thessaloniki with a stake well under 49 percent.

As for EPA Attiki, the ownership could remain as is, with DEPA maintaining 51 percent and Shell 49 percent, the same sources informed.

Given these indications, the government, in its negotiations with the lenders, appears to be sticking to the positions adopted at a DEPA shareholders’ meeting in the summer and by the board. Ultimately, the views of the lenders will be crucial.

It has become somewhat of a common secret that the lenders have persisted for DEPA to adopt a more passive role in the retail gas market with EPA stakes of no more than 49 percent. Shell and ENI have both expressed a clear interest to acquire majority stakes in these respective ventures.

A clearer picture on the gas market’s new look should emerge within the next fortnight. Time is running out for the road map’s delivery by the end of the year, as was highlighted at yesterday’s meeting.

Besides DEPA’s role in the gas market, Shell and ENI are also seeking compensations for the premature ends to their regional monopolies in the EPA Attiki and EPA Thessaly-Thessaloniki ventures established with DEPA. An agreement had been reached for these monopolies to last until 2030.

Shell has valued the loss of the regional monopoly granted to EPA Attiki, serving the wider Athens area, at approximately 100 million euros. This amount would be split with DEPA, its partner in the venture. It is unclear to what extent Shell’s evaluation has been discussed by Greek officials.