Copelouzos acquires 10% of DESFA consortium Senfluga

The Copelouzos group’s Damco has agreed to buy a minority 10 percent share of Senfluga, a consortium formed by Snam, Enagas and Fluxys for the acquisition of a 66 percent stake of Greek gas grid operator DESFA last year, all sides involved have confirmed in a joint statement. The agreement was reached for a price of 56 million euros, sources informed.

Until now, Snam held a 60 percent stake in Senfluga, while Enagas and Flyxys have each held 20 percent shares. This consortium bought a 66% share of DESFA for an amount of €535 million last year.

“The Damco investment is the result of long and constructive dialogue between the two sides and has been built in accordance with the same terms and conditions applied for Senfluga’s acquisition of [the 66 percent] DESFA [stake] and in compliance with the existing regulatory framework,” the statement noted.

The agreement reflects a wider collaboration established between the Copelouzos group and the three European companies for international natural gas infrastructure projects.

Just months ago, Damco submitted a joint bid with Snam, Enagas, as well as Gaslog, to a tender for construction of LNG import infrastructure in Cyprus.

New gas-fired units reshaping electricity generation sector

Independent electricity producers, sensing opportunities, are reshaping the sector by planning the development of new gas-fired power stations to replace the power utility PPC’s outgoing lignite-fired units. The independent producers are even replacing power stations of their own, launched about 15 years ago, as part of the overall drive.

The country’s required withdrawal of old lignite-fired power stations operated by state-controlled PPC, as well as the implementation of the target model, beginning in the summer of 2020 with a link of the Greek and Italian electricity markets, followed by a Bulgarian link as a second stage, have been cited as the two main factors bringing about this change of scene in the electricity production sector.

The independent producers GEK TERNA (Heron), Mytilineos (Protergia) and Elpedison, as well as new arrivals such as the Copelouzos and Karatzis groups, have all expressed an interest to acquire licenses for the development of new power stations.

PPC, heavily reliant on lignite-based production, is gradually losing grip of its dominance in the electricity generation sector.

Pushed higher by the EU’s environmental policy, rising CO2 emission right costs, now nearing 30 euros per ton after being worth approximately 5 euros per ton a year-and-a-half ago, are a key factor in the developments.

PPC’s CO2-related costs rose to 279.5 million euros in 2018 from 141.6 million euros a year earlier.

Elpedison enters race for new gas-fueled power station

Elpedison has submitted an application to RAE, the Regulatory Authority for Energy, for an electricity production license concerning an 826-MW combined cycle gas-fueled unit in the Thessaloniki area, next to an existing company unit.

The investment plan, estimated to be worth 400 million euros and requiring about two years to complete, is the fifth application submitted by as many companies for a gas-fueled power station.

The companies still need to make final business decisions to proceed with these investment plans. The country’s grid capacity is believed to have space for one or two new gas-fueled power stations over the next few years.

Production licenses have already been granted by RAE for some of the other four applications while the processing of the others is believed to have reached an advanced stage.

The Mytilineos group has applied for a 650-MW unit at the corporation’s energy hub at the Viotia (Boeotia) area’s Agios Nikolaos location, slightly northwest of Athens. The Copelouzos group submitted an application for a 660-MW unit Alexandroupoli, northeastern Greece; Gek-Terna is looking to develop a 660-MW gas-fueled power station in Komotini, in the north; and the Karatzis group, owner of the KEN electricity company, aims to develop a 665-MW in the country’s mid-north, in Larissa.

Investors interested in PPC lignite units, challenges remain

With just 19 days remaining until the May 28 deadline for binding bids in the main power utility PPC’s bailout-required disinvestment of its Megalopoli and Meliti lignite power stations, prospective bidding teams appear interested but challenges remain for the sale, relaunched after an initial attempt failed to produce a result.

The candidates are believed to be preparing decent offers based on the current SPA terms, Greek electricity market conditions and EU climate change policies.

The Czech Republic’s Sev.En Energy, joined by GEK Terna; CHN Energy-Damco Energy (Copelouzos Group); Mytilineos; and Elvalhalkor are preparing worthy offers, sources have informed.

China’s CHN Energy and Sev.En Energy have emerged as the chief partners of their respective pairings, while their Greek associates have assumed negotiating roles with PPC.

Mytilineos and Elvalhalkor are both still looking to establish an association for the disinvestment and are also pushing for further sale term improvements.

The Greek participants are particularly keen to acquire the lignite units as a means of breaking PPC’s monopoly and avoiding any new sale attempt that would also bring hydropower units into the picture and end up attracting major European players with financial might.

Greek energy firms are looking to avoid the market entry of foreign competitors as this would lead to market share contractions and a loss of their leading domestic roles.

Despite the investor interest, the sale attempt remains challenging for all sides. The Megalopoli and Meliti lignite units, according to PPC’s financial results for 2018, incurred losses of more than 360 million euros. Also, CO2 emission right costs are continuing on their upward trajectory, while Brussels’ tough stance on carbon is  stiffening.

 

Copelouzos to begin development of Alexandroupoli power plant

The Copelouzos group’s Damco Energy plans to soon start developing a combined cycle power station in northeastern Greece’s Alexandroupoli area with support from a major foreign energy company, not yet named, energypress sources have informed.

RAE, the Regulatory Authority for Energy, granted a license for the project just days ago. The Copelouzos group submitted its application in December.

The facility is planned to be linked to the prospective Alexandroupoli FSRU by a company-owned gas pipeline, meaning Damco Energy will avoid transmission costs as the gas grid operator DESFA’s network will not be needed. This should offer the power station a competitive advantage.

Though planned as separate projects, the Alexandroupoli FSRU, an LNG terminal, and the Damco Energy power plant promise to establish synergies as one unit will support the other.

The power plant’s operating costs and production capacity, planned to offer 662 MW over a 35-year period, promise to offer grid dispatch advantages, a related study conducted by the Copelouzos group has shown.

The project is seen contributing to Greece’s wider decarbonization effort and the intermediary role to be played by natural gas in electricity generation until renewable energy sources can fully take over.

The Copelouzos group plans to complete the combined cycle power station’s development in 27 months, while its commercial launch is expected early in the second quarter of 2022, following testing.

 

 

Minister promises lifeline extension for PPC’s Kardia power station

The main power utility PPC’s Kardia power station in northern Greece’s Kozani area will continue to operate beyond May, when the facility’s EU-approved 17,500-hour lifespan expansion is due to expire, a union group leader has contended following talks with energy minister Giorgos Stathakis, mindful of upcoming elections.

The government has agreed to strict European Commission withdrawal terms for the Kardia unit.

One of the Kardia power station’s units, Kardia III, has just 13 days of operating time remaining.

In comments to local media, Moschos Moschou, the head of PPC’s Spartakos union group, representing workers employed in electricity production, has assured that a lifespan extension beyond May would be granted to Kardia as part of Greece’s effort to meet energy sufficiency and energy security requirements.

Moschou and the energy minister also discussed the lifeline extension of another PPC unit, Amynteo, given an additional 32,000 hours from the previous 17,500.

PPC has already received four different Amynteo environmental upgrade proposals from the Mytilineos, Copelouzos, Peristeris and Intrakat groups. No agreements have been reached.

Private-sector investors will need to participate in any Amynteo power station upograde, the energy minster told Moschou, according to the union leader.

 

 

 

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 Elvalhalkor 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.”

 

 

 

ELPE, PPC among firms eyeing DEPA Trade majority stake

The field of contenders believed to be examining a majority stake (50% plus one share) of DEPA Trade to soon be offered through a tender include Promitheas (Copelouzos, Gazprom), Motor Oil, Mytilineos and ELPE (Hellenic Petroleum), which revealed an interest in the natural gas market last week, while presenting group results.

The main power utility PPC another firm that has indicated it intends to enter the gas market to offset anticipated losses in the electricity market is another possibility. However, PPC’s financial standing and ability to access capital markets could prove to be an obstacle.

Promitheas has shown particular interest in DEPA’s international agreements, Motor Oil is looking closely at EPA Attiki, the gas utility DEPA’s supply firm covering the wider Athens area, while Mytilineos appears to be focused on the utility’s international trade and gas supply activity.

An energy ministry draft bill splitting DEPA into two new corporate entities, DEPA Trade and DEPA Infrastructure, ahead of the utility’s bailout-required privatization was ratified in Greek parliament late last week.

The tender offering a majority stake in DEPA Trade is expected to be launched in about one month. The privatization fund will not wait for the procedures concerning DEPA’s split to be completed before launching the DEPA Trade tender. Investors will be offered a minority stake in DEPA Infrastructure at a latter date.

 

PPC acts against Ahlada mine operator for better supply terms

The main power utility PPC has taken extrajudicial action against a family-run enterprise licensed by the utility to operate the Ahlada mine supplying the nearby Meliti lignite-fired power station in northern Greece in an effort to secure improved terms for prospective buyers of the power station. It is included in the utility’s bailout-required disinvestment of lignite assets.

The existing agreement between PPC and the Rozas family enterprise,  licensed to operate the mine, does not secure price and quantity stability. Prices vary depending on the yield offered by extracted lignite. Also, PPC believes development at the mine is too reserved. It is anticipated that greater output would lower the price of lignite per ton.

Prospective buyers who took part in PPC’s recently failed first attempt at completing its lignite package sale identified the Ahlada mine’s current supply agreement for Meliti as a disincentive. A team comprising China’s CHN Energy and the Copelouzos group was particularly troubled. The supply agreement will be passed on to Meliti’s prospective owner.

Two other requests forwarded by prospective buyers – staff cuts and the adoption of a profit-and-loss sharing mechanism for the units sold – are in the process of being added to the follow-up sale effort’s new terms.

PPC is currently supplied Ahlada lignite at a price of 23 euros per ton for its Meliti mine but wants the price level reduced by five euros per ton, which would generate annual savings of approximately 12.5 million euros.

PPC fate in hands of Brussels, hydropower units addition a fear

The main power utility PPC’s future corporate make-up, following the apparent debacle of its bailout-required disinvestment of lignite units, now lies in the hands of the European Commission, whose intentions are soon expected.

Even if the Mytilineos group does submit an improved follow-up offer today, as has been requested, for PPC’s Meliti facility in Florina, northern Greece, and the unit is sold, the country’s commitments to the European Commission will not have been fulfilled.

Two units of PPC’s Megalopoli facility failed to attract investors, meaning the sale’s objective of reducing PPC’s lignite market share by 35.6 percent cannot be attained.

The initial offer made by the Mytilineos group for Meliti is believed to be well under the price tag set by an independent evaluator for the facility.

Another offer made by Seven Energy and Terna, for Megalopoli, was apparently rejected for not meeting terms, while the sale’s third contender, a team comprised of the Copelouzos group and CHN Energy, ended up not submitting any offers.

The crucial question, as things have turned out, is whether Brussels will bring Greece’s hydropower units into the picture, as an addition to the lignite package.

The energy ministry is definitely worried about such a prospect and insists this remains a red-line issue for energy minister Giorgos Stathakis.

Greece will be under considerable pressure should Brussels and the country’s other lender institutions decide to associate the lignite unit sale’s apparent debacle with Greece’s slow progress in opening up the retail electricity market to competition.

Data provided by the energy exchange for December showed PPC’s retail market share rose to 80.29 percent from 78.63 percent in a month. According to bailout terms on the matter, PPC’s market share at the end of 2018 was supposed to have dropped to 62.24 percent before reaching 49.24 percent by the end of 2019.

 

 

Copelouzos, Karatzis groups also planning gas-fueled units

The Copelouzos and Karatzis corporate groups are the latest energy-sector players planning to develop new natural-gas fueled power stations, following Mytilineos, already granted a production license, and Gek Terna, whose project plan had become known but was not officially announced until yesterday.

The Copelouzos group has applied to RAE, Greece’s Regulatory Authority for Energy, for a production license concerning a 660-MW combined cycle power plant in Alexandroupoli, northeastern Greece. The Karatzis group, owner of the electricity supplier KEN, has submitted an application to the authority for the development of a 665-MW combined cycle facility in the mid-north Larissa area.

The Copelouzos group submitted its application to RAE in December while the Karatzis group forwarded its bid to the authority last month, energypress sources have informed.

As has been previously reported, the Mytilineos group plans to develop a 650-MW facility in the Viotia area, northwest of Athens, while Gek Terna is preparing to set up a 660-MW gas-fueled unit in Komotini, northeastern Greece.

The similar capacities envisioned for all four project plans are not coincidental. Technical experts consider power plant capacities of approximately 660 MW as ideal for optimal efficiency.

PPC lignite units sale failure highly likely, day after examined

The main power utility PPC’s ongoing effort to sell its Megalopoli and Meliti power stations as part of a bailout-required disinvestment of lignite units appears increasingly likely to fail as possible buyers are maintaining an unfavorable view of the prospects of the units on offer.

An extended deadline for binding bids is nearing and expires on February 6.

PPC has planned a series of meetings for today with the sale’s three possible buyers – CHN Energy-Copelouzos group, Seven Energy-Gek Terna and Mytilineos – to update on the progress of its voluntary exit plan offered to employees at the Megalopoli and Meliti units and transfer of 400 employees to other units.

PPC believes these changes will transform the loss-incurring units into profitable ventures but the buyers remain tentative. Their analysis of data made available paints a darker picture.

The sale’s participants have called for the implementation of a profit-and-loss sharing system for Megalopoli and Meliti. The European Commission has rejected a plan forwarded by PPC but the investors contend it was very different to a preliminary plan embraced by Brussels. The buyers also want a more drastic reduction of employees at the two plants to 480 from the previous combined total of 1,248. They are also demanding clarity on the CAT remuneration eligibility of the two plants and a clearer picture on the lignite price for supply from the Ahlada mine to the Meliti unit.

The energy ministry is believed to already be examining options based on EU regulations should the sale effort fail. If so, the ministry believes the forthcoming European Parliamentary elections, to be held May 23-26, will hold up and thrust forward the sale to a future date.

PPC sale deadline extension ‘pointless without better terms’

Investors considering the main power utility PPC’s bailout-required sale of lignite units expect new sale-term improvements beyond certain incentives already offered now that a last-minute decision was taken by authorities earlier this week to extend a January 23 binding bids deadline to February 6.

“There is no point in the deadline extension if further incentives are not offered,” a source at one of the sale’s contender firms told energypress, echoing the thoughts of all possible buyers. The PPC units on offer are not capable of generating profit figures under the sale’s existing terms, the source added.

Contenders have remained adamant on earlier views. The Czech Republic’s Seven Energy, which has teamed up with Gek Terna for this sale, insists on a 50 percent staff cut at two power stations, Megalopoli and Meliti, included in the sale package. Both plants remain loss-incurring, the candidates remind.

A team made up of China’s CHN Energy and the Copelouzos group is demanding a lignite supply cost reduction, especially for the Meliti plant.

The energy ministry is under less pressure to complete state-controlled PPC’s sale effort now that Greece’s bailout program has concluded and the country’s borrowing ability is no longer directly linked with the bailout terms.

At worst, energy ministry officials believe, the PPC sale effort will sink and the European Commission will again challenge the power utility’s dominant position in Greece’s lignite market, seen as a slow bureaucratic procedure.

PPC lignite unit contenders up pressure, new deadline possible

Three contenders considering the main power utility PPC’s sale of its Megalopoli and Meliti lignite-fired power stations included in a bailout-required disinvestment of lignite units are intensifying their pressure on PPC for more favorable terms as the deadline for binding bids approaches.

In response, PPC has been eager to present any new favorable developments that have emerged from the implementation of incentives in an effort to support the sale’s conditions and price-tag potential.

This was demonstrated yesterday by chief executive Manolis Panagiotakis in comments to journalists.  He made reference to the results of a voluntary exit plan offered to employees at the Megalopoli and Meliti units, both loss-incurring. A total of 360 employees working at the two lignite-fired power stations have accepted the offer. Prospective buyers have indicated they want the workforce at Megalopoli and Meliti, totaling 1,248 prior to the voluntary exit plan, to be cut down to 600. PPC has just announced a voluntary transfer plan for Meliti and Megalopoli unit employees to other company posts.

Panagiotakis also noted PPC is negotiating with the owners of the Ahlada lignite mine, feeding the Meliti power station, for a lower supply price and longer supply agreement.

Reacting to the PPC chief’s comments, China’s CHN and the Copelouzos group’s Damco, one of the sale’s three potential bidding teams, described the results of the staff reduction effort at the two power stations as a good basis for cost reduction.

A consortium comprising the Czech Republic’s Seven Energy and Gek Terna has refused to comment. The Seven Energy firm has yet to present itself as a certain participant in the sale. In recent times, it has made note of narrow profit margins despite the voluntary exit plan, CAT remuneration uncertainties surrounding for the two units, and increased CO2 emission right costs.

Panagiotakis, the PPC chief, yesterday told journalists the Mytilineos group remains a contender for the Megalopoli and Meliti power stations. The Mytilineos group has not responded but, according to sources, remains troubled by what it sees as an unfavorable investment conditions surrounding the lignite sector, including the sharp rise in CO2 emission right costs.

Just days remain before the sale’s January 23 deadline for binding bids expires. An extension could be required as a result of PPC’s last-minute Ahlada mine negotiations and a Brussels delay concerning the European Commission’s position on Greece’s CAT remuneration mechanism proposal, a crucial factor for the lignite units sale.

 

 

PPC pressuring ministry on Amynteo power station’s future

The main power utility PPC is maneuvering to increase the pressure on the government for action that would ensure the inclusion of the power utility’s lignite-fired Amynteo power station in the country’s energy mix over the coming years, secure its environmental upgrade and attract investors for its sustained utilization.

PPC appears to remain unconvinced of the government’s intentions to keep the Amynteo power station alive despite assurances from energy minister Giorgos Stathakis that the facility’s two units, totaling 600 MW, have been factored into the country’s electricity production calculations until 2030.

PPC is demanding a study as verification of the government’s Amynteo plan.

A 17,500-hour operating time limit imposed on the Amynteo power station by the European Commission for environmental reasons expired just over a month ago but Greek authorities have decided to sustain its operations while working on a revamp plan that would enable the unit to keep operating. Brussels is believed to be gearing up a sanctions procedure but it would typically move along at a slow pace.

The Mytilineos group, Gek Terna, Copelouzos and Intrakat have all expressed interest for involvement in an Amynteo upgrade.

The national energy and climate plan, currently undergoing public consultation, projects an installed capacity reduction of fossil fuel-fired power stations from 4.3 GW to 3.4 GW in 2020. A slight rise to 3.5 GW is foreseen for 2025 before this capacity is slashed to 2.7 GW in 2030.

Elpedison set to begin importing gas via Bulgarian link in 2019

Energy firm Elpedison has finalized all details, including grid capacity reservations, to begin importing natural gas into Greece as of 2019 via the Greek-Bulgarian interconnection, according to sources.

The company’s move, promising to add Elpedison to a growing number of major domestic energy players engaging in cross-border natural gas trade, aims to improve the firm’s supply mix and bolster its portfolio.

Elpedison is expected to begin importing at levels of 500 MWh with a view to increasing amounts.

Besides the gas utility DEPA, three private-sector players, Promitheas – a member of the Copelouzos group – Mytilineos and Heron, are already importing natural gas through the Greek-Bulgarian border.

The Greek-Bulgarian border was opened for natural gas trade in 2017 following agreements signed by the respective gas grid operators of the two countries.

Elpedison’s turn to natural gas follows its already heightened level of cross-border electricity trading activity, reaching as far as central Europe and Hungary.

Elpedison, on a positive course, is expected to end 2018 with favorable EBITDA results.

 

Brussels set to launch action against Amynteo overtime use

The European Commission is set to launch a sanctions process against Greece in response to the country’s continued use of main power utility PPC’s lignite-fired Amynteo power station, whose 17,500-hour operating time limit, imposed for environmental reasons, expired approximately three weeks ago, on November 19.

The news of the imminent Brussels action was disclosed by a highly-ranked Directorate-General for Environment official in Athens last Friday, who added the specific department, responsible for EU policy on the environment, has not received any Greek extension request.

European Commission sanction procedures for such issues are typically lengthy and could take anywhere between a year or two to complete from the time Brussels forwards its initial complaint, the two sides exchange ensuing letters, Athens raises an anticipated objection, and Brussels issues a ruling, an official who is well-informed on the process told energypress.

Athens will aim to utilize this period and push ahead with a plan to complete an Amynteo power station upgrade that would enable the revamped unit to keep operating. The development of Ptolemaida V, a modern facility, may also be completed by then.

The Amynteo upgrade is not expected to begin until a bailout-required sale of three power stations at Megalopoli and Meliti has been completed.

The Mytilineos group, Gek Terna, Copelouzos, joined by China’s Shenhua, as well as Intrakat, have all expressed interest for involvement in the Amynteo upgrade.

 

 

Brussels asks RAE to inspect Chinese entry into Greek RES sector, IPTO

RAE, the Regulatory Authority for Energy, acting on a European Commission request, has begun an examination process to determine if a strategic agreement between the Copelouzos group and China’s state-run CHN Energy for the latter’s acquisition of wind energy parks creates any EU regulation issues regarding fellow state-run SGCC’s (State Grid Corporation of China) recent 24 percent stake buy into Greek power grid operator, authority sources have informed energypress.

RAE has been asked to examine whether CHN Energy’s agreement to buy Copelouzos wind energy farms with a total capacity of 1,500 MW violates an EU directive concerning the separation of a single entity’s activities in energy production, supply and transmission, according to the same sources.

In essence, RAE is being asked to inspect IPTO’s current certification as a result of SGCC’s purchase of a stake in the Greek operator before determining whether a follow-up certification process will be needed.

Much ground needs to be covered before the strategic agreement reached between the Copelouzos group and CHN Energy turns into an actual deal, the RAE sources told energypress.

The European Commission’s intervention is also linked to CHN Energy’s interest in the main power utility PPC’s ongoing sale of the Meliti and Megalopoli lignite-fired power stations, part of a bailout-required sale of PPC lignite units, the sources admitted.

Alexandroupoli FSRU tender draws major international interest

More than ten companies are believed to have expressed official interest in a tender launched by Gastrade, a member of the Copelouzos group, for provision of a vessel to be used as part of the FSRU facility in Alexandroupoli, northeastern Greece, as well as for the LNG terminal’s development.

The tender’s deadline expired last Friday. Major international players have submitted offers, including foreign companies in collaboration with Greek contractors.

A market test measuring the level of interest for capacity reservations at the planned LNG terminal in Alexandroupoli, promising to serve as a gateway for gas supply to the wider Balkan region, is being concurrently held with the tender. The results of the current market test, whose deadline expires in mid-December, will be pivotal for the project’s final investment decision. A follow-up market test, for binding commercial interest, will also be staged.

The Alexandroupoli FSRU, planned to be constructed as a fixed facility 17.6 kilometers southwest of the city’s port, will have an LNG storage capacity of 170,000 cubic meters and the ability to supply gas at a rate of 900,000 nm3 per hour or 8.3 billion nm3 per year.

Construction of the Alexandroupoli FSRU is scheduled to commence in 2019 while its completion date has been set for July, 2020. The unit’s launch is expected in late September, 2020.

 

Brussels grants investors one-month extension for PPC bids

Investors have been given a one-month extension for second-round binding bids concerning the main power utility PPC’s sale of lignite units following the European Commission’s approval of a request made by China’s CHN Energy, which has joined forces with the Copelouzos group for this sale.

Subsequently, prospective buyers now face a November 17 deadline for their binding bids. The deadline extension had been widely anticipated over the past ten days or so following hints made by energy ministry officials at the recent Thessaloniki International Trade Fair.

The additional time provides energy ministry and PPC officials with an opportunity to negotiate with Brussels for the possible inclusion in the sale of a CAT remuneration system for lignite-fired electricity generation.

CHN Energy and the Copelouzos group had requested up to two months of additional time but the deadline extension was limited to one month by a  Monitoring Trustee overlooking the overall sale procedure on behalf of the European Commission.

Both the energy ministry and PPC officials fear offers by investors could remain low, higher CO2 emission right costs being a key factor. CAT remuneration would offer some incentive for bigger bids.

Initial hopes of a total sale price of around one billion euros for PPC lignite units and mines representing 40 percent of the utility’s overall lignite capacity have now deescalated to levels of several hundred million euros. Some investors have suggested offers could be considerably lower.

GEK-Terna, which has united with the Czech Republic’s Seven Energy for the PPC sale; another Czech firm, EPH; ElvalHalkor, a member of the Viohalko group; as well as Mytilineos, are the sale’s other second-round qualifiers.

Brussels considering small deadline extension for PPC sale

The European Commission appears to be considering a second-round binding bids deadline extension for the main power utility PPC’s bailout-required sale of lignite units following a request made by China’s CHN Energy, one of the sale’s contenders.

According to Greek energy ministry officials, Brussels could extend the deadline by a few weeks, less than an additional one to two months sought by CHN. The current deadline expires on October 17.

CHN, which has joined forces with the Copelouzos group for the PPC sale, has so far submitted 224 queries regarding PPC’s sale of lignite units.

Both the energy ministry and PPC are concerned increased CO2 emission rights costs, currently up to levels of around 22 euros per ton, could negatively impact the price levels prospective investors would be willing to pay for the power utility’s lignite units.

Also, the European Commission does not appear likely to make PPC’s lignite units eligible for CAT remumeration rewarding grid input. However, an unspecified partial reward system is believed to be in the making.

 

Surprise US player may enter Alexandroupoli FSRU team

An additional member, possibly a major US player, could join a consortium for the development and operation of an FSRU project in Alexandroupoli, northeastern Greece, with a 20 percent stake, in addition to DEPA, the public gas corporation, and Bulgaria’s BEH, both preparing to also enter the project’s corporate team.

Technical details are now being worked on by the Bulgarian government for the entries of DEPA and BEH to the Alexandroupoli FSRU’s consortium. It was initiated by Gastrade, a member of the Copelouzos group, before Gaslog, an international LNG carrier, also joined.

The government in Sofia is expected to offer its approval within the current month. Once this stage is completed, the consortium will be comprised of Gastrade (40%), Gaslog (20%), DEPA (20%) and BEH (20%). The additional entry being touted would acquire half of Gastrade’s stake, giving all members equal stakes.

Cheniere, the dominant player of the US natural gas market, and another unnamed American enterprise, regarded as a surprise candidate, are both being touted as possible additions to the Alexandroupoli FSRU consortium.

The addition of a non-American enterprise has also been mentioned as Gastrade is believed to be engaged in talks with major traders showing an increasing interest in the specific region.

“A final decision will be reached based on the added value, both strategically and financially, to be brought to the project by the new shareholder,” a source involved in the developments informed energypress.

Meanwhile, a two-stage market test is expected to be launched by mid-September. Gastrade anticipates an accurate measure of the overall commercial interest in the project by the end of 2018, before it makes investment decisions. If all goes as planned, the FSRU project will be ready to operate at the end of 2020.

Important project news is expected to emerge this Friday at a Hellenic-American Chamber of Commerce conference in Thessaloniki, held ahead of the Thessaloniki International Trade Fair, opening Saturday.

The Alexandroupoli FSRU is seen as an important project that may ensure supply of new natural gas quantities to the Greek and regional southeast European markets, while also contributing to the diversification of supply sources and routes. The PCI-status project plan is being widely supported at Greek, EU and cross-Atlantic levels.

 

PPC lignite sale regaining pace, 4 of 5 candidates interested

Four of five investment teams that submitted first-round expressions of interest for the main power utility PPC’s sale of bailout-required sale of lignite mines and power stations appear to have sustained their interested now that the disinvestment procedure is regaining speed following the summer slowdown in August.

Investors have actively sought sale-related information in the virtual data room established for the disinvestment ahead of a series of separate interviews, planned to begin next week, with PPC officials for further clarification of the assets up for sale, including technical and financial details. Interested parties are expected to submit binding second-round offers in October.

Czech firm EPH (Energeticky a Prumyslovy Holding) appears to have retreated and will most likely not take part in the upcoming series of meetings. Until now, EPH representatives have yet to request any meeting with PPC officials.

On the contrary, Seven Energy, another Czech firm that emerged in the first round, has stationed a representative in Athens, seems very interested, and has joined forces with local powerhouse GEK Terna.

Investors still need to gain further information as the two companies founded to offer two separate sale packages, respectively representing PPC lignite units in Greece’s north and south, did not exist prior to this sale’s launch. As a result, prospective buyers need to be particularly careful and seek further details on corporate, legal and sale matters.

PPC’s chief executve Manolis Panagiotakis is not expected to participate in the power utility’s series of forthcoming meetings with investors.

Despite certain reservations as a result of lignite’s indefinite future in Greece’s energy mix, all other four investment teams appear interested in PPC’s two sale packages, representing 40 percent of the power utility’s overall lignite capacity.

Besides the GEK Terna-Seven Energy partnership, the Copelouzos group has been joined by China Energy (Beijing Guohua Power), while the Mytilineos group and ElvalHalkor also emerged in the first round.

DEPA planning pricing changes, new formula for all consumers

DEPA, the public gas corporation, is preparing to revise tariff formulas applied by the company to determine purchase prices offered to all consumer categories, including large-scale consumers, energypress sources have informed.

Until now, electricity producers have been offered special natural gas supply terms compared to household consumption, especially for heating purposes.

The gas company is believed to have completed studies that have produced results indicating leeway exists for adjustments concerning flexibility and supply security offered to customers.

It has become clear at DEPA that tariffs need to be adjusted to the energy sector’s new, liberalized and competitive environment, as shaped by institutional and regulatory changes adopted.

DEPA will seek to adopt fairer pricing formulas for all consumers, regardless of category.

The gas company has already begun negotiations with all its suppliers and is aiming to make changes over two stages. The first stage concerns the period up to 2020 or 2021 when contracts entailing gas supply by Turkey’s Botas and Algeria’s Sonatrach expire. The second stage will factor in the activation of a supply agreement for Azerbaijani natural gas via the TAP gas pipeline and Greece’s geopolitical emergence as an energy hub and role of the country’s energy exchange.

Of course, DEPA’s negotiations will also include Russian giant Gazprom, whose current supply contract for the Greek gas utility ends in 2026, and, possibly, a diversification effort by DEPA that could incorporate American LNG and spot market deals into its portfolio.

Overall, these developments changes could require DEPA to alter its gas prices offered to electricity producers, which could spark reactions from the main power utility PPC as well as independent electricity producers.

If DEPA manages to offer fair and competitive natural gas packages, then it could lay the groundwork for a leading role amid the new liberalized market.

Competition in the wholesale natural gas market is intensifying. Besides DEPA, other importers are also supplying gas to the Greek market, the main players being the Copelouzos group and the Mytilineos group.

 

 

 

 

 

Prospective PPC unit buyers maneuvering for partnerships

First-round participants in the main power utility PPC’s bailout-required sale of lignite mines and power stations representing 40 percent of capacity are heightening their efforts to form partnerships for the sale procedure ahead of an upcoming July 31 deadline and could be close to announcing arrangements, energypress sources have informed.

In one of two main fronts taking shape, one of two Czech firms that have emerged for the sale and said to be displaying a strong interest in Greece’s lignite market is close to reaching a deal with a major Greek corporate group, sources said.

On the other main front, a high-voltage industrial enterprise also taking part in the sale is said to be exploring the possibility of merging with the aforementioned scheme or partnering with the Copelouzos-China Energy scheme.

The high-voltage industrial enterprise is entitled CO2 emission right cost offsetting support, a definite advantage, even though most recent calculations indicate CAT remuneration support is also needed to make competitive the PPC lignite facilities being sold.

Though no further details on the players have emerged at this point, the sale appears to be developing into a showdown between the Copelouzos-China Energy scheme and a second team to be comprised of a foreign firm with a Greek partner, sources noted.

The aforementioned high-voltage industrial enterprise could side with either team, the sources added.

Also, both candidate teams are believed to be interested in the sale’s two separate packages, respectively comprised of PPC assets in the country’s north and south.

DEPA sale schedule now rests with Competition Committee

An on-schedule launch of the DEPA gas utility’s privatization procedure will depend on the time it will take the Competition Committee to approve a recent local takeover agreement between DEPA and Shell concerning the Greek gas utility’s acquisition of the Dutch firm’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area.

DEPA went into the negotiations with Shell already holding 51 percent stakes in these joint ventures. The deal was reached for a price of 150 million euros.

If the Competition Committee approves the DEPA-Shell agreement by September, then the DEPA privatization could begin on schedule, in September or October, with the gas utility’s split into two firms, DEPA Infrastructure and DEPA Trade, as agreed to by the government and the country’s lenders for the privatization.

According to the plan, a 50.1 percent stake of the trading firm is expected to be offered to investors while 14.9 percent, including veto rights, will be maintained by the Greek State. As a second stage of the privatization, the Greek State’s offering to investors of DEPA Infrastructure will be limited to a minority stake of no less than 14 percent. The Greek State is expected to retain a 51 percent stake in DEPA Infrastructure.

The gas utility’s privatization procedure will most likely be delayed until 2019 if the Competition Committee requires an extended period to examine the DEPA-Shell agreement.

Pundits closely following the developments have not ruled out delays in the DEPA privatization procedure.

Greek petroleum group Motor Oil Hellas lodged an official complaint to the Competition Committee over the DEPA-Shell agreement while it was still in the making, noting it would enable DEPA to dominate natural gas supply in the wider Athens area. Motor Oil plans to soon enter Greece’s natural gas retail market through its subsidiary Coral (Shell).

DEPA, whose repositioning in Greece’s natural gas retail market was included as a bailout term, has also reached a deal with Italy’s Eni. DEPA agreed to withdraw from the Zenith gas supply company covering the country’s north by selling its 51 percent stake in this venture to the Italian firm, previously a minority partner with a 49 percent share.

At least three key players, Mytilineos, the Copelouzos group and ELPE, which already holds a 35 percent stake in DEPA, have expressed an unofficial interest for DEPA Trade.

These players, as well as others who have yet to disclose their interest, all see DEPA Trade as an enterprise that is ready for robust business given DEPA’s experience, existing customer base and foreign deals. More crucially, the investors also see a company that is soon expected to wholly own the EPA and EDA supply and distribution firms which, until recently, monopolized the retail gas market in the wider Athens area.

 

Copelouzos group emerges as latest DEPA Trade candidate

The Copelouzos group has stepped forward to made clear its interest in a 51 percent stake of DEPA Trade, gas utility DEPA’s forthcoming subsidiary to be offered as part of a bailout-required privatization along with a minority stake in DEPA Infrastructure, the DEPA sale’s other subsidiary in the making.

The Copelouzos group is the latest major player to have emerged as a prospective buyer of DEPA Trade. Mytilineos and ELPE (Hellenic Petroleum), holding a 35 percent stake in DEPA, have both already declared they will bid for DEPA Trade.

Mytilineos and ELPE expressed their interest in DEPA Trade immediately following the recent unveiling of the DEPA privatization model. More interested investors are expected to emerge, including Motor Oil Hellas (MOH).

Just recently, Motor Oil Hellas made known an intention to enter the retail natural gas market through the fuel station network controlled by its subsidiary Coral.

Motor Oil Hellas has lodged an appeal to the competition committee against a local takeover agreement between DEPA and Shell, selling its 49 percent stake in their EPA Attiki natural gas supply joint venture, covering the wider Athens area, to DEPA. The gas utility already holds a 51 percent share of this joint venture and, as a result, will fully control own EPA Attiki.

DEPA already holds the biggest gas supply contracts in the country’s wholesale market and a complete takeover of EPA Attiki would offer the gas utility an unfair advantage over competitors, Motor Oil Hellas argues.

Without a doubt, the prospective field of DEPA Trade bidders sees major potential in the country’s natural gas market. The gas utility’s vast experience, existing client base and major wholesale gas agreements are all seen as big positives generating interest for DEPA Trade. Control of EPA Attiki, a key retail market player, promised by a 51 percent stake in DEPA Trade, is another prospect exciting investors.

All first-round PPC units sale participants to make next stage

All first-round participants of the main power utility PPC’s bailout-required sale of  lignite mines and power stations representing 40 percent of the utility’s overall lignite capacity meet the procedure’s criteria to qualify for the next stage, PPC officials have unofficially made known.

A total of six bidding schemes submitted non-binding expressions of interest for the sale’s first round, expected to end today with the announcement of qualifiers.

As of Monday, the sale’s second-round qualifiers will gain access to the procedure’s data room for two months – once they have signed confidentiality agreements – to evaluate technical and financial information concerning the power stations and mines up for sale.

A consortium comprising Beijing Guohua, a subsidiary of China’s Shenhua, and Damco Energy, a wholly owned subsidiary of the Copelouzos group; GEK-Terna; ElvalHalkor, a member of the Viohalko group; Czech firm EPH (ENERGETICKÝ Α PRŮMYSLOVÝ HOLDING); Indoverse Coal Investments Limited, also Czech; as well as Mytilineos, all submitted first-round expressions of interest.

The wide turnout could lead to aggressive bidding in the next round, when investors will be expected to produce binding offers. However, not all pundits are convinced turnout alone will be enough to generate elevated bids for a lofty sale price.

PPC’s administration has stressed solid incentives are needed for the prospective investors, including CAT payment assurances for the units included in the disinvestment’s packages, one covering the country’s north and the other the south.

Second-round terms are expected to be announced to the qualifying schemes next week. PPC and the utility’s advisers have pushed the sale’s authorities for the most favorable terms possible in an effort to increase the sale’s appeal for investors.

PPC wants terms that will enable, even encourage, participants to join forces. Mobility is being reported among the first-round bidders, including the Czech bidders, believed to be maneuvering for possible partnerships.

The second-round terms are also expected to clarify whether participants will be permitted to submit a joint offer for the sale’s northern and southern packages. Sources said such a provision will be included in the second-round terms, based on a formula applied for the privatization of regional airports around Greece.

The PPC disinvestment’s Greek-Chinese bidding team of Beijing Guohua and Damco Energy, which yesterday signed a partnership agreement for this sale yesterday, made clear it is interested in both the northern and southern packages.

CAT eligibility vital for prospects of PPC units sale, chief notes

The level of investor interest, asset value and achievable sale price of a bailout-required sale of main power utility PPC lignite mines and power stations will depend on whether the units being offered will be eligible for CAT remuneration, the power utility’s CEO, Manolis Panagiotakis, has told journalists.

Strong political support by the government, perhaps from its top level, will be needed as European Commission directives issued so far exclude lignite units from CAT mechanism payments, the PPC boss noted.

Conventional power stations, such as lignite-fired units, must satisfy a CO2 emission limit of 550 grams per KWh to qualify for CAT mechanism payments.

A European Commission proposal calling for even stricter limits is gaining growing support throughout Europe.

Given the developments, the PPC lignite units placed for sale will most likely remain ineligible for CAT support. If so, this will severely limit their appeal for investors in general. They would need to be taken on by industrial enterprises active in sectors eligible for mechanisms offsetting a considerable percentage of CO2 emission right costs.

Meanwhile, taking the sale process a step further, PPC shareholders yesterday approved a split from the corporation of the two lignite unit packages being offered in the sale of lignite mines and power stations, representing 40 percent of the utility’s overall lignite capacity.

Yesterday’s approval now enables PPC to open a data room through which six candidate investors will be informed on the details of assets included in the disinvestment.

“Our work begins now – to correctly inform interested parties, make appropriate presentations and highlight the details that make the units attractive investment prospects – in order to to achieve a satisfactory sale price,” PPC’s chief executive, Manolis Panagiotakis, informed journalists. “Now is also the time for the government and the European Commission to show, with action, their support for lignite-related production,” he added.

Three major local players, GEK-Terna, Mytilineos and ElvalHalkor, a member of the Viohalko group, as well as a fourth, the Copelouzos group, joined by Beijing Guohua, a wholly owned subsidiary of China’s Shenhua, submitted first-round expressions of interest for the PPC lignite units. Two Czech firms, EPH (ENERGETICKÝ Α PRŮMYSLOVÝ HOLDING) and Indoverse Coal Investments Limited, also emerged as surprise participants.

 

 

 

PPC sale draws expected local players, Shenhua, Czech firms

Three major local players, GEK-Terna, Mytilineos and ElvalHalkor, a member of the Viohalko group, as well as a fourth, the Copelouzos group, joined by Beijing Guohua, a wholly owned subsidiary of China’s Shenhua, have – as was anticipated – all submitted first-round expressions of interest for the main power utility PPC’s sale of bailout-required sale of lignite mines and power stations. Two Czech firms, EPH (ENERGETICKÝ Α PRŮMYSLOVÝ HOLDING) and Indoverse Coal Investments Limited, also emerged as surprise participants. The deadline for expressions of interest expired yesterday afternoon.

PPC needs to disinvest power stations and mines units representing 40 percent of the utility’s overall lignite capacity.

The list of first-round bidders could be revised if partnerships are established or entrants fail to meet criteria enabling qualification for binding bids in the second round. The PPC board will decide on the qualifiers.

Finalized investment schemes will need to be officially declared by the end of July. A September deadline is expected to be set for binding bids.

It is not yet known if any of the sale’s early participants intend to submit binding second-round bids. They are expected to decide after examining PPC’s financial, technical and legal information to be made available to first-round participants through a data room. Investors are not expected to decide any sooner than next month.

The sale price to be demanded by PPC will be a crucial factor for investors. Though definitely interested in acquiring lignite-fired power stations and mines as a means of  controlling their cost of electricity sold, participating suppliers are troubled by the rising production cost of solid fuel-based power generation, a development prompted by EU climate change policies.