Two, possibly three, bidders for South Kavala UGS license

An upcoming tender to offer an underground natural gas storage facility (UGS) license for the almost depleted South Kavala offshore natural gas field in the country’s north is expected to attract the interest of two, or possibly three, bidding teams.

Interested parties have been given an extension to express non-binding first-round interest. Prospective participants are busy preparing.

The participation of Storengy – a three-member consortium formed by France’s Engie, Energean Oil & Gas, holder of the South Kavala field’s license, and construction firm GEK-Terna – is considered a certainty as this consortium was established in anticipation of this tender.

Greek gas grid operator DESFA, increasingly active, since its privatization, in various projects, including some beyond its more customary operator-related bounds, is seen as another certain bidder for the South Kavala UGS license.

Senfluga, the consortium of companies that acquired a 66 percent stake of DESFA, appears very interested in the South Kavala UGS tender. This consortium’s current line-up is comprised of: Snam (54%), Enagas (18%), Fluxys (18%) and Copelouzos group member Damco (10%).

Though Senfluga’s three foreign partners – Snam, Enagas and Fluxys – are examining the prospect of joining DESFA to express joint interest, separate bids from the two sides are considered likeliest. The main reason for this has to do with certain tender rules that restrict the ability of consortiums participating in the first round to then reshuffle, if needed.

Pricing policy regulations expected from RAE, the Regulatory Authority for Energy, ahead of binding offers, will be crucial to how the tender plays out as these rules will determine the project’s earnings potential and level of bids.

PPC, Copelouzos end idle joint venture, grounded for years by unions

Power utility PPC and the Copelouzos group have agreed to dissolve a joint venture, PPC Solar Solutions, formed eight years ago for development of retail outlets around Greece for electricity sales, energy services and domestic solar panel installations, but never able to get off the ground.

Fierce and adamant opposition by PPC union groups against the joint venture, formed in January, 2012 as an innovative move – for its time – stifled the business plan.

The Copelouzos group’s Damco held a 51 percent stake in this joint venture, PPC holding the other 49 percent.

In 2017, the power utility’s then-CEO, Manolis Panagiotakis made an effort to revive the idle business plan, but his initiative also sparked a heated response and resistance from PPC unions.

Senfluga allocates €500,000 to Greek health and non-profit sectors

Senfluga, the company owned by Italy’s Snam (54%), Spain’s Enagas (18%), Belgium’s Fluxys (18%) and Coupelouzos Group’s DAMCO ENERGY SA (10%), has allocated 500,000 euros for the Greek health system and non-profit sector, the company announced in a statement.

These Senfluga funds enabled the purchase of 90,000 isolation suits from a Chinese supplier. The medical material will be shipped to Greece in the next few days.

The donation is also aimed at supporting social initiatives advanced by foundations. Funds have already been primarily allocated to the national health system as well as NGOs such as ActionAid Hellas, Doctors of the World Greece and IASIS, which, together, have activated a helpline and are contributing to efforts made by the Greek State for relief and support measures.

Senfluga is the main shareholder of Greek gas grid operator DESFA with a 66 percent stake.

DESFA wants key role in country’s infrastructure projects

Gas grid operator DESFA, controlled by Senfluga, a consortium formed by Snam, Enagas and Fluxys for their acquisition of a 66 percent stake of the operator in 2018, is determined to play a leading role in all the country’s infrastructure projects as well as Greece’s wider natural gas-related developments.

“We see our role as being that of the leader in Greece’s gas sector and the wider region. We are interested in every gas project and want to be able to claim it. We also have the know-how and strong shareholders to play such a role,” a DESFA official told energypress.

According to sources, DESFA’s emergence as a prospective buyer of DEPA Infrastructure, a new entity established by gas utility DEPA as part of its privatization procedure, prompted officials to slightly extend the sale deadline.

More specifically, Snam, the Senfluga consortium’s chief member with a 54 percent stake, requested a deadline extension for the DEPA Infrastructure as it has yet to decide on its partners for this bidding quest. Enagas and Fluxys each hold 18 percent stakes in Senfluga. The Copelouzos group’s Damco recently joined this consortium, buying a 10 percent stake.

DESFA’s influence is also believed to have persuaded officials to delay a decision on whether to classify the development of a natural gas storage facility at a depleted offshore gas field in the south Kavala region as a national or independent grid project.

Snam, Enagas and Fluxys are part of the six-member Trans Adriatic Pipeline (TAP) consortium.

DESFA, which has signed a Memorandum of Understanding for the Alexandroupoli FSRU, is now seriously considering to acquire a 20 percent stake in this venture, headed by Gastrade.

Other projects being considered by DESFA include a 175 million-euro Cretan LNG terminal that promises to resolve the island’s energy sufficiency concerns, as well as a 57.3-km gas pipeline connection linking the Thessaloniki area with North Macedonia, already included in the operator’s ten-year strategic plan.

 

Copelouzos’ DESFA 6.6% buy inspection ready by September

RAE, the Regulatory Authority for Energy, expects to complete its inspection of the Copelouzos group’s entry into gas grid operator DESFA early in September, enabling the agreement’s completion.

Earlier this month, the Copelouzos group’s Damco agreed to buy a 10 percent stake of Senfluga, a consortium formed by Snam, Enagas and Fluxys for the acquisition of a 66 percent stake of DESFA last year. This promises to offer Damco a 6.6 percent share of DESFA.

RAE’s endorsement could be delayed beyond early September if the authority requests further details on the agreement, some sources warned.

Damco’s decision to acquire a 6.6 percent stake of DESFA, officially announced on August 5, signals the Copelouzos group’s interest for a wider association with Snam, Enagas and Fluxys in international infrastructure projects.

The Senfluga consortium was established with Snam as its main shareholder, holding a 60 percent stake, joined by Enagas and Fluxys, each with 20 percent stakes.

The Copelouzos group, in association with Gaslog, an international LNG carrier run by Panagiotis Livanos, has launched an effort for the development of an FSRU in Alexandroupoli, northeastern Greece. Greek gas utility DEPA, its Bulgarian peer Bulgartransgaz, and private investors are also expected to become involved in this project.

Highlighting the domestic natural gas market’s growing potential, DESFA is also eyeing an imminent tender for the development of an underground gas storage facility at a depleted natural gas field in the offshore South Kavala region.

 

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.

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.

 

 

PPC sale contenders embrace coal cost cut, await SPA terms

Prospective buyers considering the main power utility PPC’s bailout-required sale package of lignite units, relaunched after an initial effort failed to produce a result, have responded favorably to news of a lignite supply cost reduction for Meliti, one of the stations up for sale, but they remain on hold awaiting the sale’s finalized SPA terms before reaching conclusions.

PPC has secured a lignite supply cost reduction of 28 percent for its Meliti power station following an agreement with the operator of the Ahlada mine feeding the power station. The lignite supply price has come down to 16.5 euros per ton from 23 euros per ton.

“The finalization of any pending issue is positive news [for the sale], but we will take positions once we see the SPA,” one source noted.

A total of six bidding teams are participating in the sale. Beijing Guohua Power Company Limited, joined by Damco Energy; China Western Power Industrial; the Czech Republic’s Sev.En Energy – Indoverse Coal Investments Limited; GEK Terna; Elvalhalkor; and Mytilineos make up the field of contenders.

 

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.