Three bidders express first-round interest in South Kavala UGS tender

Τhree interested parties have submitted expressions of interest to a tender offering use, development and operation of an underground natural gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece, The Hellenic Republic Asset Development Fund (HRADF S.A.) has announced in a statement.

Expressions of Interest were submitted by the following parties, in alphabetical order:

  • CHINA MACHINERY ENGINEERING CO. LTD. (CMEC) – MAISON GROUP
  • DESFA – GEK TERNA
  • ENERGEAN OIL & GAS

HRADF’s advisors will evaluate the aforementioned expressions of interest and submit to the fund’s Board of Directors their recommendation regarding the candidates that qualify for the next phase of the tender (binding offers phase).

The almost depleted natural gas field “South Kavala” is located in the southwestern part of the Prinos-Kavala basin, in 52 meters of water depth in the North Aegean Sea, about 6 km off the west coast of Thassos.

The duration of the concession agreement will be up to 50 years following the licensing of the UGS in South Kavala. The conversion of the natural gas field “South Kavala” into a UGS will be carried out by the concessionaire within a binding period to be determined in the concession agreement.

The UGS South Kavala is intended to serve as energy infrastructure that will enhance the security of supply in the Greek market as well as in Southeastern Europe, ensuring gas supply to end users and facilitating security-of-supply obligations of power producers and natural gas suppliers.

New PPC lignite sale’s field of contenders disclosed today

The field of contenders entering the non-binding first round of main power utility PPC’s renewed sale of lignite units, a bailout requirement, will be unveiled to the utility this afternoon by HSBC, managing the sale’s expressions of interest procedure.

It remains unknown if two undisclosed investors from Russia and the USA, as well as China’s CMEC will emerge as additional entries to the previous sale attempt’s list of contenders, as was recently announced by PPC’s chief executive Manolis Panagiotakis.

The PPC boss has also indicated that Czech firm EPH, a participant in PPC’s initial sale effort, intends to reenter.

Expressions of interest are once again expected from Seven Energy, another Czech firm, with Gek Terna as its partner for this sale, China’s CHN Energy with the Copelouzos group, as well as Mytilineos, according to sources.

All three formations had taken part in the initial sale effort and reached a consultation stage that shaped the disinvestment’s sales and purchase agreement. Offers were submitted by Seven Energy-Gek Terna and Mytilineos.

The participation of Elvalhalcor is uncertain. This firm could move to take part in a consortium at a latter stage.

On the one hand, a wider field of prospective buyers promises to intensify bidding, while, on the other, this will increase investor demands for greater incentives as a condition for binding bids.

The PPC boss contends Meliti and Megalopoli power station units included in the sale are profitable but investors see unfavorable prospects given the EU’s decarbonization policy.

Also, an unfavorable supply agreement between PPC and the operator of the Ahlada mine feeding the utility’s Meliti unit remains unresolved. PPC wants improved terms. The existing contract, not securing price and quantity stability, was seen as a drawback by participants in PPC’s initial sale.

Furthermore, CAT remuneration eligibility for sale package units remains uncertain. The European Commission has yet to deliver news on this front.

The sale’s new evaluation procedure, seen producing a lower price, is another headache for PPC. The utility’s boss insists PPC units “will not be sold to investors seeking swift profit within a year or two.”

 

 

 

Relaunched PPC lignite sale planned for completion May 5-8

The main power utility PPC’s follow-up sale attempt offering lignite units, planned to move ahead swiftly with the aim of producing a preferred bidder between May 5 and 8, ahead of European Parliament and local elections, is being relaunched today with investor-friendly terms intact following the initial sale’s failure to excite candidates.

Besides three bidding teams that took part in the first sale attempt, the relaunched sale is expected to include new entries.

PPC’s chief executive Manolis Panagiotakis has returned from a brief trip to China having secured the participation of two Chinese entries, China Energy and CMEC, while two more firms, Russian and American, have also decided to bid for the PPC units, according to the PPC boss.

Last-minute revisions were needed following intervention by the European Commission’s Directorate-General for Competition. Panagiotakis is scheduled to visit Brussels next week for further talks.

According to the revised terms, PPC holds the right to commission a new evaluation of the assets included in the disinvestment, a bailout requirement.

The previous evaluation, projecting an IRR figure of 10.7% and lignite costs at 28.5 euros per ton, was not to blame for the initial sale effort’s failure, the PPC chief has insisted.

Extremely unfavorable market conditions at the time of the sale, including investor insecurity over CO2 emission right costs, as well as serious pending issues such as the need for an improved lignite supply agreement with the operator of the Ahlada mine feeding the Meliti power station, one of the units up for sale, were key reasons behind the failure, Panagiotakis has supported.

A voluntary exit plan for employee reductions at units included in the sale package, Brussels pre-notification for CAT remuneration eligibility of units, and the result of ongoing negotiations with the Ahlada mine’s operator all offer improved potential for a successful sale procedure, the PPC boss has highlighted.

Interested bidders will need to express interest by the end of next week. The re-registration procedure for bidders who took part in the initial sale attempt will be limited to an official statement noting that no changes have been made.

Consultation for the sale and purchase agreement (SPA) will be held over a period of 20 days to one month. Its finalized terms will be announced a week later. Contenders will then have one week to submit their binding offers before a preferred bidder is declared between May 5 and 8. An extraordinary PPC shareholders’ meeting and a parliamentary session will follow to approve the transfer of units to new owners.

 

 

 

PPC lignite units draft bill ratified, sale price a challenge

The successful staging of a bailout-required sale of three main power utility PPC lignite-fired units as well as mines, whose draft bill was ratified in parliament yesterday, stands as the next major challenge for both the government and the power utility.

The units to be offered for sale in the form of two packages, representing assets in the north and south, need to be split from the corporation by the end of May so that the tender’s staging may immediately follow. The entire sale procedure needs to be completed within 2018.

PPC’s chief executive Manolis Panagiotakis is confident the power utility will emerge from the sale as a smaller but more robust corporation.

“PPC stands to gain from a successful sale of lignite units,” Panagiotakis declared in parliament. “We will turn a page, meet our commitments and change the firm’s energy mix,” he added.

Failure to complete the sale, representing 40 percent of PPC’s lignite capacity, will inevitably bring the utility’s hydropower units into the picture.

PPC and the energy minister Giorgos Stathakis are desperate to avoid such a development, vaguely described as a resort to “structural measures” in the bailout if PPC fails to meet its obligations concerning its shares of the retail electricity market and production.

The participation of major energy firms and the price offers they will be willing to make are crucial factors for the sale’s success.

A desired price for the assets included in the sale package has not been included in the bill just ratified. A minimum price level is anticipated from an independent valuator.

Lignite asset values around Europe have been impacted by the EU’s decarbonization policy as well as projections of elevated CO2 emission right costs in the future.

At this stage, it appears that the mimimum price level to be set by the independent valuator is unlikely to be reached by investor offers.

Both the energy minister and PPC boss are confident investors from Greece and abroad will express interest in the sale package.

Panagiotakis, the PPC chief, believes the investment interest from abroad will be led by Chinese firms, including CMEC, SPIC and Shenhua.

 

 

 

 

 

 

 

CMEC a notable Chinese absence at Thessaloniki fair

Nine Chinese energy companies have registered to take part in the upcoming 82nd Thessaloniki International Fair among the country’s total of 151 participating firms, but CMEC (China Machinery Engineering Corporation), which had signed a Memorandum of Understanding (MoU) with Greece’s main power utility PPC last September, will be notably absent from the event.

CMEC has previously shown an interest in developing and acquiring majority control of Meliti II, a second carbon-fired power station planned by PPC in the Meliti area, close to Florina in the country’s north. However, Greek government thoughts of a tender for mining rights at the Vevi mine, crucial to the feasibility of Meliti II, and bailout-related demands requring PPC to sell lignite-fired stations appear to be troubling CMEC. Presumably, CMEC officials see no prospects in the Meliti plan.

Besides the Greek market, the Chinese firm and PPC have also discussed making joint investments in the wider Balkan region. CMEC’s absence from the Thessaloniki fair, scheduled for September 9 to 17, has now also raised questions as to whether the Chinese firm is also abandoning the Balkan plan it has contemplated with PPC as a partner.

Whatever the case, the fair remains a particularly important event for PPC. On Saturday, the Greek power utility’s chief executive Manolis Panagiotakis is scheduled to sign an MoU with China Development Bank (CDB) during a conference to be staged by CDB titled “Investment Opportunities in Southeast Europe”.

SGCC (State Grid Corporation of China), which has acquired a 24 percent stake in IPTO, Greece’s power grid operator, and Shenhua, which had expressed an interest upgrading PPC’s two lignite-fired power stations at Amynteo before a landslide devastated a mine in the area, have both registered to take part in the Thessaloniki trade fair.

Chinese firms still without a Greek market presence are also participating, including Shanghai Electric Group Company, the world’s largest manufacturer of steam turbines.

CEFC, a diverse private corporate group whose portfolio includes interests ranging from energy to tourism, and Beijing Guohua Power, investing in energy projects, are also among the Chinese firms to be represented in Thessaloniki.

Shenhua Guohua Energy Investment Co, a Shenhua subsidiary focused on wind energy investments; Electric Power Planning & Engineering; Shanghai Electric Group Corp; and Shanghai Building Materials Group Energy Conservation, make up the trade fair’s other Chinese energy-sector participants.

 

 

 

 

 

PPC Renewables, China’s Sumec Group sign MoU

PPC Renewables, a wholly owned subsidiary of main power utility PPC, and the Sumec Group, a member of the China National Machinery Industry Corporation (Sinomach), whose membership also includes CMEC, signed a Memorandum of Understanding today at the PPC headquarters in Athens.

The MoU concerns the development of renewable energy projects in Greece and the wider region, as well as the provision of energy services, especially in energy efficiency, a domain in which Sumec possesses extensive experience, PPC announced in a statement.

Manolis Panagiotakis, PPC’s chief executive, Ilias Monaholias, the head official at PPC Renewables, and Cai Jibo (photo), the Sumec Group’s president, all took part in the signing ceremony and meeting.

Also in attendance was Liu Huifeng, a representative of Sinosure (China Export & Credit Insurance Co), an investment insurance company.

Sumec officials at the signing ceremony noted that the Chinese company intends to establish Greece as its operating base for the wider region.

Panagiotakis, the PPC boss, highlighted the significance of the collaboration between PPC Renewables and Sumec. He stressed that PPC, the parent company of PPC Renewables, will fully support the initiative, while also hinting at a possible partnership between PPC and Sumec.

PPC head stresses utility’s persistence with China partnerships plan

The main power utility PPC’s top official has once again highlighted his determination to stick to a plan envisioning business partnerships with Chinese enterprises as a way out of the utility’s problems along many fronts.

Manolis Panagiotakis, PPC’s chief executive, is counting on Chinese capital and knowhow as support for the utility’s new investment plans, intended to offset bailout-required market share losses in electricity production and retail, the official made clear in an interview for Chinese news agency Xinhua, which took place in northern Greece’s west Macedonia region, a key local energy producing region.

PPC’s administration is striving to lead the utility into a new era where business interests will stretch beyond electricity production and sales, Panagiotakis noted in the interview, adding that Chinese firms are pivotal to these aspirations.

Panagiotakis noted that agreements already reached between PPC and major Chinese firms point to a bright future for Greek-Chinese collaborations in the energy sector. Chinese enterprises can play a fundamental role in the Greek energy sector’s new strategic planning, the PPC chief remarked.

The PPC head cited the utility’s plan for the co-development, with CMEC, of a lignite-fired power station in Meliti, northern Greece. He described this as a feasible project regardless of the outcome of a bailout-required sale faced by PPC concerning 40 percent of its lignite capacity.

He also made note of another plan involving CMEC for the development of a smart meters production facility. A preliminary agreement has already been signed for this project.

Panagiotakis described SGCC’s (State Grid Corporation of China) recent acquisition of a 24 percent stake in IPTO, Greece’s power grid operator, as a positive development. He stressed that PPC is keen to expand this SGCC strategic partnership, citing the electric car market and a submarine power cable interconnection project to link the Greek mainland with Crete.

The PPC chief also noted that the Greek power utility is interested in working with Shenhua on various projects concerning innovation in the environmental sector, an area in which Shenhua has made major progress, he added.

Panagiotakis has held meetings with 21 major Chinese enterprises on two official visits to China since taking over the helm at PPC about two years ago.

 

 

 

 

PPC adamant on Meliti II plan with CMEC despite obstacles

The main power utility PPC appears adamant on its plan to develop a new lignite-fired power station, Meliti II, despite various unfavorable conditions, including objections raised by the government.

PPC, which has signed a Memorandum of Cooperation with CMEC, the China Machinery Engineering Corporation, for this project, recently made reference to its need in a public consultation procedure staged by RAE, the Regulatory Authority for Energy, for a 10-year development plan concerning the national electricity transmission system.

The Meliti II reference was made in a power utility contribution to the public consultation procedure, dated June 7, several weeks after various government officials had raised objections to PPC’s Meliti II plan, envisaged with CMEC as a partner.

PPC boss Manolis Panagiotakis recently noted that the inclusion of the existing  PPC Meliti I lignite-fired power station and the prospective Meliti II facility to the utility’s bailout-required list of unit sales would require any contract for the latter’s development to be offered through a tender.

PPC and the energy ministry have each hired separate consultants to prepare bailout-required sale lists containing 40 percent of the utility’s lignite capacity.

A recent landslide that led to the closure of PPC’s two Amynteo lignite-fired power stations has further complicated matters by bringing Meliti II into the picture for possible inclusion on the bailout-required sale list.

 

 

 

 

Meliti II inclusion on PPC sale list ‘would affect CMEC plan’

The inclusion of the existing main power utility PPC Meliti I lignite-fired power station and the prospective Meliti II facility to the utility’s bailout-required list of unit sales would require any contract for the latter’s development to be offered through a tender, the corporation’s chief executive Manolis Panagiotakis clarified today during a general shareholders’ meeting.

If the Meliti units are not included on PPC’s bailout-related unit sale list then PPC should not have any issues actualizing its plan, the utility chief pointed out.

Just days ago, deputy development minister Stergios Pitsiorlas noted that collaborations such as a partnership envisaged by PPC with CMEC, the China Machinery Engineering Corporation, for the construction and operation of Meliti II would need to be established through tenders. This was widely viewed as a further government obstacle to PPC’s plans.

“Much will depend on the procedure determining the units to be included in PPC’s sale package,” the PPC chief noted during today’s general shareholders’ meeting. The list of PPC lignite-fired unit sales needs to be prepared by next month.

“Preparing this list is not a simple matter as power stations cannot be split into units, nor is it easy to break up the mines supplying these power stations,” Panagiotakis remarked.

Prior to Pitsiorlas’s remarks, energy minister Giorgos Stathakis announced that a new tender would need to be staged for part of the Vevi mine, whose output would be crucial for Meliti II.

“If the Vevi mine’s current tender runs into trouble then this is sure to create problems with the Chinese investors for the Meliti project,” the PPC head noted. “This would also affect supply for PPC’s existing Meliti I power station,” he added.

 

 

Bailout an obstacle for Chinese interest in PPC projects

Greek energy ministry and main power utility PPC officials appear to be fully aware of concerns in Brussels over warming Greek-Chinese ties for various Greek energy-sector projects, as indicated by additional terms in the recently revised bailout agreement.

These European Commission concerns explain why PPC chief Manolis Panagiotakis remained reserved despite a firm interest expressed by Chinese investors for the Greek energy market during his visit to China earlier this week.

A clause added to the revised bailout, which notes that prospective buyers of PPC units, “based on available information, should neither create any apparent competition problems nor cause delay risks in the implementation of structural measures” could, in one sense, be interpreted as an attempt to obstruct the development of Meliti II and, in addition, block Chinese investors from buying exisiting PPC units and becoming involved in partnerships for the construction and operation of new ones.

PPC and CMEC (China Machinery Engineering Corporation) signed a Memorandum of Understanding (MOU) last September and have held extensive talks on joining efforts for the development of Meliti II, a prospective carbon-fired power station in the Meliti area, close to Florina in Greece’s north.

The Chinese State, which controls CMEC, is also behind SGCC (State Grid Corporation of China), whose agreement to acquire a 24 percent stake in the power grid operator IPTO, a PPC subsidiary, was endorsed by Brussels several days ago. Brussels appears concerned by the prospect of a concerntration of control for the Chinese State.

Pundits told energypress that the additional bailout term will obstruct PPC’s planned collaboration with Chinese companies, a prospect viewed with increased concern by EU member states such as Italy, France and Germany, which, despite their negative stance, have yet to display any clear interest in PPC’s prospective sale of utility units, a bailout requirement.

CMEC, still requiring certain details before making a final decision, appears keen to move ahead with the development of the Meliti II project, sources informed following the PPC chief’s visit to China. The issue may have cleared up within the next month. The future of the nearby Vevi mine, whose coal supply is crucial for existing Meliti I and prospective Meliti II, is a pivotal factor that will influence CMEC’s interest.

Energy minister Giorgos Stathakis recently announced that a new tender will need to be staged for part of the Vevi mine. If so, this could deflate CMEC’s interest in Meliti II.

In China, Panagiotakis, the PPC boss, presented his plans for the development of two more coal-fired power stations, not including Meliti II, in talks with Chinese investors, including the Shenhua and SPIC enterprises.

Shenhua appears interested in becoming involved in environmental upgrades of exisiting PPC power stations and development of new units.

 

 

PPC chief discusses new smart meter facility at CMEC meeting

The main power utility PPC’s chief executive Manolis Panagiotakis, accompanying Greek Prime Minister Alexis on a trip to China for the country’s Belt and Road Forum for International Cooperation, a premier diplomatic event, has held a series of meetings with key Chinese energy-sector figures.

Panagiotakis’s meetings, according to a PPC statement, included a session with CMEC (China Machinery Engineering Corporation) president Zhang Chun as well as other highly-ranked officials of the Chinese company.

CMEC has been exploring the possibility of collaborating with PPC for the development and operation of Meliti II, a prospective carbon-fired power station in northern Greece. Other senior PPC officials joined the utility chief for the CMEC meeting, dominated by talks concerning the Meliti II project. The meeting was described as a constructive session.

The two sides also discussed the prospect of jointly developing a smart meter production facility in Greece, which would serve both the local and foreign markets. This facility would create as many as 400 jobs, according to the Greek power utility.

PPC and CMEC signed a Memorandum of Understanding (MOU) last September for the Meliti II project.

PPC boss in China to present plans, check bailout reaction

The main power utility PPC chief executive Manolis Panagiotakis has scheduled a series of meetings with key electricity market officials in China over the next few days to present project plans and, most crucially, see how Chinese investors feel about Greece’s bailout update, revised following last week’s conclusion of the second review. He will also seek to nurture ties with Chinese investors.

The PPC chief, who plans to meet with officials at CMEC – currently examining the prospect of developing Melitis II, a carbon-fired power station in Greece’s north – the Shenhua Group, SPIC, and the China Development Bank (CDB), will present plans for the construction of two additional carbon-fired power stations, not including Meliti II.

If Panagiotakis’s plan to develop additional power stations with Chinese support is to make any progress, several bailout-related developments will need to be overcome. The existing Meliti I and prospective Meliti II power stations must be exempted from a sale package of PPC carbon-fired power stations specified in the updated bailout agreement; energy minister Giorgos Stathakis needs to reverse an intention to stage a new tender for a mine at Vevi, whose supply is crucial for Meliti II; PPC will need to be granted permission to form partnerships with private-sector companies; and a Greek bid for free CO2 emmission rights at the European Commisison must succeed.

In an interview with Greek daily Kathimerini, the PPC boss stated he believes a certain degree of leeway in Brussels continues to exist, expressing confidence that Greece’s lenders, including the European Commission, will reexamine certain aspects of the latest bailout.

A meeting between Panagiotakis and CMEC president Zhang Chun will be important as the two officials have already extensively discussed the Meliti II project.

On his visit to China, the PPC chief will accompany Greek Prime Minister Alexis Tsipras at a Beijing conference, the Belt and Road Forum. PPC officials hope the prime minister will underline the Meliti II project remains alive.

Once back from China, Panagiotakis will travel to Brussels to present his PPC plans to the European Commission.

 

CMEC, fearing developments, places Meliti II plan on hold

CMEC (China Machinery Engineering Corporation) appears to have decided to put on hold the prospect of developing and acquiring majority control of Meliti II, a second carbon-fired power station planned by the main power utility PPC in the Meliti area, close to Florina in the country’s north.

The Chinese company, which has deployed a technical team on a fact-finding mission over the past few months, is troubled by the prospect of a new tender for mining rights in Vevi, whose supply is crucial to the feasibility of Meliti II. Energy minister Giorgos Stathakis recently announced a new tender for Vevi would need to be staged.

Hestitancy has also set in at CMEC as a result of a bailout-required plan obligating Greece to sell a proportion of carbon-fired power stations operated by state-controlled PPC.

According to energypress sources, CMEC has requested an official update on the developments.

A Memorandum of Understanding (MOU) signed by PPC and CMEC last September was regarded as a move in the direction of new PPC partnerships sought by the energy ministry for the power utility.

The plan that had been announced entailed CMEC holding a majority stake in a partnership with PPC for Meliti II, whose construction would be fully funded by the Chinese company, as well as Meliti I, an existing unit.

PPC boss insists Vevi mine will not affect Meliti II project

A government plan entailing the development of Meliti II, a second coal-fired power station for the main power utility PPC in the Meliti area, close to Florina in the country’s north, will go ahead, the utility’s chief executive Manolis Panagiotakis has reassured in comments offered to energypress.

The project’s prospects were shaken following remarks made yesterday by energy minister Giorgos Stathakis, who declared that a new tender will need to be staged for the nearby Vevi coal mine license as, according to the minister, a previous competition did not comply with regulations.

Presumably, CMEC (China Machinery Engineering Corporation), currently examining the prospect of developing the Meliti II unit, would not get involved if coal supply from the Vevi mine is not assured.

The state-controlled PPC boss noted that he recognized the need for a new Vevi tender, while expressing confidence that this development would not affect the government’s decision to collaborate with CMEC for the development of Meliti II.

 

Plan for new Vevi mine tender jeopardizes Meliti II project

Energy minister Giorgos Stathakis has disclosed an intention to not have endorsed in Greek Parliament an agreement reached in 2014 by a previous administration’s ministry and Aktor granting the latter exploitation rights of a coal deposit in Vevi, northern Greece, but, instead, launch a new international tender from scratch.

This development greatly threatens the possibility of CMEC (China Machinery Engineering Corporation) taking on a project to develop Meliti II, a second coal-fired power station for the main power utility PPC in the Meliti area, close to Florina in the country’s north. The Chinese firm’s involvement in the Meliti II project is seen to be highly unlikely if coal supply is not ensured.

“The energy ministry reminds that the segment of the Vevi coal mine offered through non-transparent procedures to private investors without an international tender will be reoffered through a legal procedure,” the energy ministry noted in a statement released today.

An agreement signed in 2014 between the energy ministry of the time and Aktor never made it to Greek Parliament for ratification as a result of snap elections that led to political change. The Syriza party was brought to power as the key partner of the country’s coalition.

The Bobolas group, which owns a 25 percent stake of Aktor parent company Ellaktor, a Greek construction giant, has repeatedly pushed for the finalization of the Vevi mine agreement’s pending Parliamentary approval.

IPTO sale process may trouble PPC-CMEC power station plan

The main power utility PPC’s plan to forge a partnership with China’s CMEC (China Machinery Engineering Corporation) for the development of Melitis II, a prospective lignite-fired power station of strategic importance in Greece’s north, could be jeopardized by the ongoing approval process required in Athens and Brussels for the power grid operator IPTO’s new company standing following an agreement with another Chinese firm, SGCC (State Grid Corporation of China), to acquire a 24 percent stake in the operator, a PPC subsidiary amid a bailout-required process of breaking away from its parent company.

Both CMEC and SGCC are essentially controlled by one owner, the Chinese State. This could potentially prompt the European Commission’s Directorate General for Competition to intervene on the IPTO certification process as a DG Comp regulation specifies that operator shareholders cannot hold any interests in the supply or production of electricity.

Taking this regulation into consideration, CMEC could ultimately decide to not invest in the Melitis II project.

At this point in time, there is no direct connection between the IPTO certification process and the Melitis II project as the latter is still being examined as an investment prosect by CMEC.

As for the IPTO certification process, RAE, the Regulatory Authority for Energy, has just offered its preliminary approval following an examination on whether the SGCC acquisition agreement for a 24 percent stake of the operator complies with EU criteria. The European Commission will also need to endorse the ownership unbundling procedure before RAE finalizes its approval.

The European Commission is entitled to take up to two months to deliver its decision. If this time is fully utilized, the IPTO split-and-sale process, which has already fallen behind on its tight bailout-related schedule, could be further delayed.

Theoretically, this delay could trigger action for the entire sale of IPTO in place of the current plan, through which the Greek State is expected to end up with a 51 percent stake of the operator. However, the delay, not extensive, is expected to be absorbed.

 

 

CMEC boss set to return for new round of Melitis II talks

CMEC China Machinery Engineering Corporation) appears to be viewing its possible development of Melitis II, a second  lignite-fired power station in Greece’s north for the main power utility PPC,  as an investment of strategic importance.

According to sources, the Chinese corporation’s head official Zhang Chun is preparing to make a return visit to Greece to discuss the project’s development with PPC’s chief executive Manolis Panagiotakis. The Chinese official last visited in October. An MoU had been signed by the two sides on that occasion.

A team of CMEC technical officials, recently in Greece for a close-up assessment of the existing facility, including the region’s mines, have delivered a report to the Chinese corporation’s leadership. Besides the facility’s construction, CMEC also appears interested in acquiring a stake in the venture.

Indicative of CMEC’s growing interest in the Melitis II project, China’s ambassador to Greece, Zou Xiaoli, also visited the existing Melitis unit last week, where he met with the PPC boss.

Officials at the Chinese corporation are already seeking answers to certain questions before a final decision can be made. Concerns include the number of hours the prospective Melitis II plant would operate on an annual basis and the tariff levels to be offered for its production.

Completion of the project, should it go ahead, is not expected to be completed before 2021 or 2022, meaning the aforementioned matters would be shaped by new regulations included in the electricity market’s target model, to be implemented in 2018.

CMEC officials also want to know if direct agreements with major consumers will be permitted and whether an existing 300 euro per MWh price ceiling, applied to offer protection against price fluctuations, will remain valid.

On his next visit, the CMEC boss may also meet with officials at Aktora and Terna, which control a coal mine in Vevi. Its supply would be essential for the new power station. Three more mines are also being considered for coal supply to the prospective power station – Ahlada (owned by the Pavlidis firm) as well as Amyntaio and Klidi (both are owned by PPC).

Melitis II is planned to be developed as a 450-MW capacity facility. The project is budgeted to cost 750 million euros.

 

CMEC, following PPC agreement, to develop power station in Serbia

Following up on its recent agreement with the main power utility PPC to examine the prospect of constructing a new coal-fired power station, Melitis II, in the Florina area, northern Greece, CMEC (China Machinery Engineering Corporation) is proceeding with the development of a new power station in Serbia as part of the Chinese firm’s wider plan to expand its activities in the Balkan region.

CMEC has reached an agreement with Serbia’s EPS to construct of a new, state-of-the-art thermal electricity production station in Kostolac, eastern Serbia. This unit will utilize coal deposits in the Drmno area.

The plan includes using a new VI ECS coal-excavating unit worth 123 million dollars to help boost coal output at the Drmno deposit. The objective is to increase coal production from the present level of 9 million tons per year to 12 million tons.

The Serbian power station project is being developed by a consortium that is headed by CMEC and includes Germany’s Krupp, Austria’s Sandvik, as well as Serbian firms.

The total cost of the project, including the new power station and the coal deposit’s expansion, is worth 715.6 million dollars. A China Exim Bank loan will cover 608 million dollars of this amount, while the remainder will be provided by the EPS corporation.

The Serbian power station is scheduled to be completed in 2020.

As for the prospective Melitis II power station in northern Greece, a team of CMEC technical officials recently visited the area to assess the existing infrastructure – Melitis 1 and the mines – in order to prepare a report for the company’s administration. A CMEC decision on whether it will be interested in developing the Florina project is expected in spring.

 

CMEC team to visit for close-up look at Melitis II project plan

A team of CMEC (China Machinery Engineering Corporation) technical officials are scheduled to visit the Florina area in Greece’s north next week for a close-up examination of plans to develop a second lignite-fired power station, Melitis II, as an addition to Melitis I, operated by main power utility PPC.

The team will inspect the existing power station, coal mines and the wider region and then prepare a report for CMEC’s administration.

PPC and CMEC signed a Memorandum of Understanding in Athens last September concerning the construction of a second PPC lignite-fired power station in Florina.

Some preliminary work has already been completed. Chinese officials sent PPC two lists of questions last September and November concerning technical and financial matters. The Greek utility has already provided answers to these.

The Chinese company will base its decision as to whether Melitis II is a feasible investment on the PPC responses as well as others that may be required, along with the report to be prepared by CMEC’s traveling technical team. A final decision is expected in spring, PPC believe.

The MoU signed between the Greek utility and CMEC states that the Chinese firm will cover the power station’s construction cost while PPC will provide its mines – 40 percent of Vevi and Klidi – as well as Melitis I for the partnership. Private-sector firms holding interests in other regional mines – Vevi’s other 60 percent and Ahlada – have been invited to take part in the Greek-Chinese venture.

According to a preliminary schedule, a consortium could be formed within 2017, while construction of the new power station will require four to five years to complete.

 

 

 

Smart meters pilot tender on final stretch without CMEC

A pilot tender being staged by HEDNO, the Hellenic Electricity Distribution Network Operator – locally acronymed DEDDIE – for the installation of an initial lot of 200,000 smart meters in various parts of the country has entered the final stretch without CMEC (China Machinery Engineering Corporation), the main power utility PPC’s new strategic partner.

Bids submitted for the project, worth 86 million euros, are expected to be opened and assessed before the end of the year. Two of three starting teams remain in the race. OTE (Hellenic Telecommunications Organization), Intrakat and Intrasoft International have joined forces to bid on the project as one corporate formation. They face Intracom Telecom as their rival bidder.

CMEC, which plans to proceed with a major investment in Greece for the development of a digital smart meters industrial facility as a collaborative effort with PPC, as was disclosed yesterday, had entered the tender with Microdata as its bidding partner. Nikos Bakoulis, a fomer president of Genop, PPC’s main union group, maintains business interests in Microdata.

However, CMEC-Microdata failed to make it through the tender’s earlier stage, last summer, involving technical assessments of offers. The CMEC-Microdata was deemed as insufficient.

Even so, CMEC appears determined to establish firm footing in Greece’s untapped smart meters market, as was highlighted by yesterday’s disclosure of the Chinese enterprise’s plan for a smart meters manufacturing facility in Greece with PPC as a partner for supply to the domestic and international markets.

The anticipated replacement of Greece’s 7.5 million conventional power meters with digital meters over the next few years represents a market worth about one billion euros.

PPC appears to be looking to secure a slice of this pie, which raises questions, as HEDNO, organizer of the current pilot tender and the full version to come for 7.5 million power meter conversions, is a wholly owned PPC subsidiary. HEDNO is also responsible for setting the technical standards that need to be met by power meters.

 

 

 

CMEC planning smart meter factory in Greece with PPC

The heads of main power utility PPC and CMEC (China Machinery Engineering Corporation) signed a strategic partenership in Athens today following a series of discussions by company officials for joint ventures concerning a variety of projects, including electricity production, RES sector investments and Balkan market penetration.

CMEC plans to proceed with a major investment in Greece for the development of a smart meters industrial facility as a collaborative effort with PPC, it was disclosed today during the proceedings. Production will be sold both in Greece and abroad.

Also, CMEC, which is planning to launch a representative office in Athens, has proposed the establishment of a company with PPC for the development of their joint ventures.

 

PPC, joined by China’s CMEC, looking to expand as far as Iran

Main power utility PPC, which recently signed a Memorandum of Agreement with CMEC (China Machinery Engineering Corporation) for joint development of a second lignite-fired power station in Meliti, close to Florina, northern Greece, plans to establish a broader strategic partnership with the Chinese company for business ventures in foreign markets as a means of covering at least some of the losses expected by the the utility from its bailout-required market contraction in Greece.

PPC’s chief executive Manolis Panagiotakis and CMEC president Zhang Chun, leading a group of company officials on a visit to Athens, are expected to sign a strategic partnership agreement in the Greek capital today. It will make official the Greek utility’s plan to seek new business opportunities beyond Greece with CMEC as a partner.

According to sources, PPC and CMEC plan to begin their endeavors by trying to penetrate the Albanian electricity market. If successful, the pair will also tap the Fyrom (Former Yugoslav Republic of Macedonia) and Kosovo markets. The PPC-CMEC partnership plans to eventually stretch out even further to the markets of Iran and Egypt, as well as Turkey.

PPC views an expanded presence in foreign markets as the only way of compensating for bailout-required losses in the Greek retail and production electricity markets. The utility needs to reduce its market share in Greece to less than 50 percent by the end of 2019. PPC’s retail market share slipped to 88.07 percent in September, down several percentage points over the past year. The utility’s virtual monopoly in Greece is gradually eroding.

As part of its foreign markets campaign, PPC has already established a subsidiary firm in Albania but has yet to do likewise in Fyrom and Kosovo.

“If PPC wants to make up for the planned Greek production and retail market share losses over the next few years, joint ventures with a foreign partner for business in the Balkans stand as more than just a strategic choice,” an official told energypress, implying the company’s survival will be at stake.

CMEC will take on a key role that may help PPC succeed in the Balkans following a series of failed attempts in the previous decade or so. The Greek utlity made its first attempt in 2003 in Romania and has since made many more unsuccessful efforts to penetrate neighboring markets. This overall failure can be attributed to the preferences of respective Balkan country governments for stronger western partners, based on reasons concerning wider political expediency, as well as poor judgement on behalf of PPC’s previous administrations.

Fyrom, Kosovo also eyed by China-backed PPC after Albania

Although still a preliminary concept, main power utility PPC’s intended regional expansion into the Balkans with the backing of Chinese capital, which could be provided by CMEC, the Greek utility’s new partner for possible construction of a power station in northern Greece, or another Chinese firm, represents a one-way road towards survival for the utility.

PPC plans to attempt entering the Albanian electricity market and, if successful, then also try and move into the electricity markets of the Former Yugoslav Republic of Macedonia (Fyrom) and Kosovo.

PPC’s leadership, along with the heads at Greece’s energy and economy ministries, have held a series of meetings with Albanian officials in recent months, generating enough interest for the Greek utility to decide, earlier this week, to establish a subsidiary in the neighboring country. Equivalent exploratory steps have yet to be taken in Fyrom and Kosovo.

“Collaborations with a foreign partner for penetration of Balkan markets constitute more than just a strategic choice if PPC wants to compensate for the planned [bailout-required] market share reductions in Greece’s production and retail sectors over the next few years,” a government official who had joined Prime Minister Alexis Tsipras on an official visit to China in July told energypress.

In this sense, CMEC as well as other Chinese companies, officials of which have held talks with PPC’s boss Manolis Panagiotakis, will play a crucial role in helping the Greek utility succeed in its Balkans expansion plan.

Previous efforts, beginning in 2003, failed to produce any results. PPC had begun by exploring the market prospects in Romania and followed up with other Balkan countries, all to no avail.

The failure of PPC’s previous Balkan quest has been attributed to politically motivated ties established by respective Balkan governments for collaboration with more powerful western partners, as well as misjudgements made by previous PPC administrations.

It remains to be seen whether PPC will be able to break the Balkan deadlock with a Chinese partner. PPC will definitely need to draw capital for international business activities if the corporation is to remain afloat in the next few years.

While commenting on yesterday’s signing of a Memorandum of Understanding with CMEC for joint development of Meliti II, a second coal-fired power station in Meliti, northern Greece, Panagiotakis, PPC’s chief executive, did not refrain from placing enormous importance on the utility’s successful entry into the Balkan region.

Actualization and success of PPC’s Meliti power station plan will be pivotal to any future Greek-Chinese collaboration beyond the Greek borders.

PPC-CMEC deal resurfaces pending Vevi mine rights issue

Yesterday’s Memorandum of Understanding signed by main power utility PPC and China’s CMEC (China Machinery Engineering Corporation) for joint development of a second lignite-fired power station in Meliti, close to Florina, northern Greece, could serve as the vehicle to provide leading Greek corporation Aktor the rights to exploit the region’s major Vevi coal mine. The licensing procedure was bogged down by the country’s political transition that brought the Syriza party into power early in 2015.

Aktor, belonging to construction and media magnate George Bobolas, was the highest bidder in a tender for the Vevi mine’s rights. Aktor’s portfolio includes mining, quarrying, construction and photovoltaics.

“We will hold a discussion with the Prime Minister [Alexis Tsipras] during our meeting tomorrow [today] so that the Vevi matter may be cleared up,” PPC president Manolis Panagiotakis told journalists following yesterday’s MOU signing ceremony as Aktor’s deputy Dimitris Koutras listened on.

Aktor, along with the GEK Terna Group, whose CEO Giorgos Peristeris also attended yesterday’s signing ceremony, will join the PPC-CMEC Meliti power station venture the PPC chief noted yesterday.

Access to the major mine in Vevi, estimated to hold 60 percent of the area’s total lignite deposit, is essential to the PPC-CMEC partnership’s prospective power station, which would be fed by this deposit. The Greek-Chinese plan entails including the mine as an asset in the consortium to be established for the project.

The plan for Meliti II entails development of a 450-MW power station at a cost of 750 million euros. Necessary work needed at the regional mines to feed the facility will raise the cost to one billion euros. PPC is believed to be open to the prospect of becoming a junior partner in this venture.

According to energypress sources, Bobolas, Aktor’s chief, has repeatedly called for the Vevi mine deal’s finalization, requiring parliamentary approval. The MOU signed with CMEC is expected to provide the impetus required.

As the winning bidder for the Vevi mine’s rights, Aktor had signed an agreement with the previous administration’s environment and energy ministry in 2014, but it was not endorsed in parliament as a result of the ensuing elections.

PPC, China’s CMEC sign MOU for new power station

Main power utility PPC and China’s CMEC (China Machinery Engineering Corporation) signed a Memorandum of Understanding in Athens today for a joint plan to construct a second lignite-fired power station in Florina, northern Greece.

Besides leading officials representing the two companies, the signing ceremony was also attended by Greek energy minister Panos Skourletis and the Chinese ambassador to Greece Zou Xiaoli.

“The signing of the MOU comes as further proof that the Greek economy has overcome the worst and is now progressing from the stabilization to recovery stage,” Skourletis noted. “This partnership represents part of a new strategy for PPC, one of strategic partnerships with reliable partners able to provide new momentum against choices seeking the corporation’s contraction.”

The Chinese ambassador to Greece made reference to Prime Minister Alexis Tsipras’s recent official visit to China, noting it highlighted that cooperation between the two countries stands at a good level, while adding that the country possesses rich lignite, wind and solar energy capacity.

CMEC’s deputy chief Fang Yanshui noted that the level of cooperation between Greece and China rose to a new level following the Greek prime minister’s visit to China, while also taking the opportunity to offer a description of the corporation’s activities around the world.

PPC boss Manolis Panagiotakis expressed hope that Meliti II, the new power station to be developed with CMEC in the Florina area, represents just the beginning of a strategic partnership between the two sides.

Aktor, a Greek corporation whose portfolio includes mining, quarrying, construction, photovoltaics, facility and project management activities, and Italian power grid company Terna may also join the venture.

The plan for Meliti II entails development of a 450-MW power station at a cost of 750 million euros. Necessary work needed at the regional mines to feed the facility will raise the cost to one billion euros. PPC is believed to be open to the prospect of becoming a junior partner in this venture.

The PPC boss and CMEC’s deputy are scheduled to hold a meeting with the Greek prime minister tomorrow.

PPC and China’s CMEC to sign MOU for new power station

Main power utility PPC and China’s CMEC (China Machinery Engineering Corporation) are set to sign a Memorandum of Understanding in Athens tomorrow, making official their joint plan to construct Meliti II, a second power station in Meliti, Florina, northern Greece.

The move will lead to the Greek utility’s second-biggest investment following Ptolemaida V, another lignite-fired power station, also in Greece’s north, whose development, pursued with other partners, is at a preliminary stage.

According to sources, the MOU will be signed at PPC’s headquarters by the Greek utility’s chief executive Manolis Panagiotakis and CMEC’s deputy chief Fang Yanshui. Greece’s energy minister Panos Skourletis is expected to attend the signing ceremony.

PPC and CMEC intend to form a consortium in which the Chinese company will hold a majority stake, as energypress has previously reported, based on information provided by sources.

According to these sources, PPC’s exisiting Meliti I power station will be included in the joint veture with CMEC, which will fully finance construction of Meliti II at a cost of 700 million euros.

Both power stations will be be fed lignite from the Meliti region’s mines, beginning with a deposit in Ahlada, located in the Florina region, followed by a mine in neighboring Vevi.

The exact extent of CMEC’s majority stake in the consortium for Meliti II will be determined by the evaluation of the Meliti I unit to be contributed to the venture.

Given the 700 million euros required to construct Meliti II, PPC’s stake may end up falling to a level of less than 40 percent. PPC could become a passive partner without a managerial role or veto rights. A company that owns the Ahlada lignite mine and is already supplying Meliti I is expected to join the venture as a third member. The Vevi mine may also be added to the consortium at a latter stage.

By taking this initiative, PPC intends to offer a solution to a European Court decision demanding the local lignite market’s liberalization. PPC also wants to take matters into its own hands for a bailout-linked measure requiring the corporation to reduce its market share to 49 percent by 2019, both in production and retail activity.

 

PPC’s China partnership for new lignite unit raises concerns

Main power utility PPC is pinning its hopes on Chinese investment and collaboration to help it overcome various challenges such as the bailout-required contraction of the utility’s currently dominant market share and a European Court penalty threat for its continued monopolistic control of the country’s lignite resources.

PPC plans to establish a consortium with China’s CMEC (China Machinery Engineering Corporation) for the construction of a secong power station in Meliti, Florina, northern Greece. The Chinese company would hold a majority stake in this project.

The Greek-Chinese agreement for Meliti II, essentially announced in a letter forwarded just days ago to energypress by PPC’s CEO Manolis Panagiotakis, will be fully funded by the Chinese company, meaning it will invest the entire 700 million euros needed to develop the Meliti power station. This will provide the foreign investor with a majority stake, reliable sources have confirmed.

PPC will contribute the exisiting Meliti I project and its lignite mines in the region to the venture for the minority share it will hold in the consortium, energypress was informed. The Greek utility’s precise stake in the Greek-Chinese consortium will depend on the evaluation of Meliti I. PPC could end up with a stake of less than 40 percent and no managerial rights in the partnership, it is believed.

Based on the plan, private-sector owners of lignite mines located in the Meliti region, suppliers of Meliti I, may also be included in the venture as a third partner by contributing their mines to the consortium for a proportionate stake.

Four regional mines, belonging to PPC and private-sector companies, are in a position to supply the prospective Greek-Chinese lignite-fired power station, if their owners agree. Two of these, the Klidi mine, currently defunct as a result of surrounding residential constraints, and a small part of the Vevi mine, which has remained closed over the past 15 years, are both owned by PPC. Aktor-Terna owns the region’s Ahlada mine. Aktor had also been granted the rights to the biggest part of the Vevi mine but the deal was never ratified in Greek Parliament, denying the company exploitation of this lignite deposit.

PPC’s partnership with CMEC would help the utility honor a bailout-required demand for market share contractions, in both retail and production, to 49 percent by 2019. The collaboration would also help the utility deal with the European Court’s lignite monopoly challenge. In addition, the Greek-Chinese partnership promises to help PPC upgrade and make more competitive its lignite-fired power production, through lower emissions, with the introduction of the Meliti II power station and withdrawal of older units.

Other undisclosed dimensions may also be at play in this Greek-Chinese partnership. For instance, PPC’s boss, in more recent times, has expressed an interest to penetrate the neighboring Albanian electricity market. CMEC, one of China’s biggest construction companies, possessing technical knowhow and capital, would be a useful partner for this prospect.

However, certain questions have emerged about PPC’s new power station plan, including its feasibility given Greece’s reduced electricity demand amid the country’s extended recession. The price level at which the new unit’s electricity output will be sold is another concern. For quite some time now, natural gas, more affordable as a result of the drop in international oil prices, has been prefered over lignite as an electricity production source. Construction costs concerning lignite-fired power stations are extremely high, as are their operating costs due to CO2 emmision charges, which are expected to reach even higher levels as a result of the EU’s environmental policies. PPC and its Chinese partner will need to drastically reduce mining costs, an extremely difficult task, if lignite-fired production is to regain its competitiveness.

PPC had launched an international tender for development of the Meliti II project in 2008 but failed to attract any investor interest. Market conditions – demand, emmision right policies – have since worsened for lignite-fired power generation prospects.

PPC boss, on China visit, seeking collaboration with CMEC

Main power utility PPC’s chief executive Manolis Panagiotakis, who has joined Greek Prime Minister Alexis Tsipras on an official visit to China, has held a series of meetings with numerous Chinese company representatives in Beijing and Shanghai.

Panagiotakis has met with representatives of 17 major Chinese companies to discuss matters concerning electricity production, smart grids, possible collaborations, as well as environmental upgrades of units, according to a PPC announcement. The PPC boss also visited Chinese power stations.

Preceding talks had been held in Athens with officials representing a number of these Chinese firms. The latest meetings highlighted the high standards and knowhow possessed by Chinese enterprises, while also confirming their interest for cooperation.

Energypress sources informed that the PPC boss’s most prominent meeting was held with officials of CMEC, one of China’s biggest construction groups with a strong international presence in major electromechanical projects.

PPC officials are believed to be interested in working together with CMEC for the development of a new lignite-fired power station in Meliti, northern Greece, and on ventures in Albania.