Motor Oil, PPC Renewables in talks for major wind energy park

Talks between PPC Renewables and the Motor Oil Hellas group for joint development, installation and operation of an island-based wind energy farm with a capacity of approximately 100 MW have reached an advanced stage, sources have informed.

The project’s feasibility, however, will depend on the development of a grid interconnection with the mainland system.

PPC Renewables and Motor Oil are currently examining details concerning the prospective wind farm’s sustainability, interconnection and financing. Once they have reached conclusions, the two sides will decide on whether to proceed with the project.

PPC Renewables and Motor Oil have already joined forces to express first-round interest in a tender offering a stake in DEPA Trade, a new entity established by gas utility DEPA.

PPC Renewables has set as a strategic objective the formation of partnerships with domestic and foreign players for new projects not included in the existing portfolio of parent company PPC, the power utility. PPC Renewables intends to develop these new projects without involvement by PPC.

The company’s wind energy park plan with Motor Oil could serve as a base for more projects involving the two sides.

PPC Renewables has already planned a series of collaborations with foreign partners, including Germany’s RWE, UAE group Masdar Taaleri Generation  D.O.O. (MTG), as well as EDP Renoveis, a Portuguese company with a Chinese main shareholder. PPC Renewables is striving to have developed RES projects with a total capacity of 1.5 GW by 2024.

Motor Oil has made clear its plan to broaden its portfolio with emphasis on green energy. The refining group wants to establish a solid presence in the renewable energy market through acquisitions and partnerships.

Motor Oil has already completed two acquisitions, a wind-energy purchase from Stefaner and a solar energy project acquisition from Metka EGN, a member of the Mytilineos group.

 

‘Firm steps for privatizations but pandemic’s impact considered’

Decisive steps are being taken for Greece’s energy-sector privatizations, representing two thirds of the country’s overall privatization program, but the pandemic’s impact on international markets will not be neglected, energy minister Costis Hatzidakis has pointed out in an interview with Greek daily To Ethnos.

There is no need to rush a plan to reduce the Greek State’s stake in Hellenic Petroleum (ELPE) as this sale is not one of restructuring character, the minister noted.

A government decision to sell stakes in DEPA Infrastructure and DEPA Trade, two new entities emerging from a split at gas utility DEPA, is moving ahead as planned, Hatzidakis informed.

First steps have been taken to reduce, below 51 percent, the Greek State’s share in power grid operator IPTO, “but this does not mean we will proceed tomorrow morning,” he said.

State-controlled power utility PPC is preparing terms of an international tender for the sale of at least 49 percent of distribution network operator DEDDIE/HEDNO, a subsidiary, the minister said. This procedure is scheduled to commence in the third quarter of this year, he added.

DEPA Infrastructure board soon, bidders shortlist in June

Corporate revisions at gas utility DEPA, shaped by legislation ratified in December, have just about been completed ahead of the enterprise’s privatization plan.

All that remains, according to sources, is an announcement of the board members at DEPA Infrastructure, one of the new corporate entities established as part of the utility’s transformation.

This announcement is expected to be made within the next one or two weeks. DEPA Infrastructure will be established as an entirely new company with its own tax file number.

DEPA Trade, another new entity emerging from the wider corporate revision, will succeed the existing DEPA utility.

The utility’s other division, DEPA International Projects will, for the time being, remain a subsidiary of DEPA Trade before it is broken away 60 days prior to the submission of bids for its parent company.

Then, as the final step of its process, DEPA International Projects will be merged with EDEY, the Greek Hydrocarbon Management Company, the government has announced.

Nine bidding teams that have expressed official interest for DEPA Infrastructure are currently providing data to the privatization fund TAIPED, expected to shortlist candidates around June, sources estimate.

Meanwhile, DEPA is preparing its video data room as well as financial and technical reports that will be examined and evaluated by investors before they shape their bids. DEPA is expected to complete these reports in May.

Ministry seeking to reignite stalled energy sector initiatives

The energy ministry is seeking to resume coronavirus-interrupted actions on a number of fronts, which, prior to the crisis, were expected to lead to major energy sector changes in 2020. These include the decarbonization effort, privatizations, green-energy infrastructure investments and a launch of the energy exchange.

The ministry’s strategic plan aiming to inject new impetus into these initiatives includes market liquidity protection through support mechanisms and bank loans for operators and key market players such as power utility PPC.

Efforts will also be made to accelerate decarbonization initiatives and keep alive pending energy sector privatizations, including those of gas utility DEPA’s two new entities, DEPA Infrastructure and DEPA Trade; the prospective sale of a 49 percent stake of distribution network operator DEDDIE/HEDNO, a PPC subsidiary; as well as an underground gas storage facility at a depleted offshore gas field south of Kavala.

Green energy investments, a key party of Greece’s revised and more ambitious National Energy Climate Plan, are expected to regain dynamic momentum as of 2021, following this year’s pandemic-induced disruption.

This is also the case for major infrastructure projects such as power grid operator IPTO’s grid interconnections for Crete, the south, west and north Cyclades and other areas. These interconnection projects require investments totaling more than 4 billion euros. These are expected to be completed by 2030.

Grid interconnection projects are also being worked on for the gas sector. Gas grid operator DESFA is looking to expand its network to cover 39 cities.

IPTO, DEPA Trade, DEPA Infrastucture sales put on hold

Energy-sector privatizations planned for launch in the second quarter, as well as sales already in progress, are being put on hold as a result of the coronavirus pandemic’s impact on the global economy and the plans of the government and privatization fund TAIPED.

Two thirds of Greece’s privatization program this year concerns energy utilities, as energy minister Costis Hatzidakis has noted.

The freeze on plans includes the sale of an additional stake of power grid operator IPTO, which was planned for the second quarter.

State Grid Corp of China (SGCC), already holding a 24 percent share of IPTO and possessing first-offer rights, has expressed an interest to boost its stake.

However, IPTO and SGCC officials have not been able to meet for talks as a result of the extreme conditions. Greece’s deputy energy minister Gerassimos Thomas had planned a trip to China one-and-a-half months ago but was unable to travel as a result of a travel ban imposed by the Chinese government following the coronavirus outbreak in China early this year.

Two privatization procedures for gas utility DEPA’s new entities, DEPA Trade and DEPA Infrastructure, both of which have drawn considerable interest, have also been put on hold.

The DEPA Trade sale attracted nine bidding teams, domestic and international, for its first round, a turnout interpreted as a vote of confidence for the Greek economy. The sale’s first-round expressions of interest could be appraised in the summer.

DEPA Trade sale’s PPC-Motor Oil union, Shell return surprise

The privatization of DEPA Trade – a new entity established by gas utility DEPA – offering the Greek State’s 65 percent stake in a procedure whose deadline for first-round offers expired yesterday, produced two surprises. Firstly, Shell reemerged in the country’s gas market following a withdrawal less than two years ago. Secondly, in an unanticipated move, power utility PPC teamed up with Motor Oil for a joint bid.

Shell departed from the Greek natural gas market in July, 2018 by selling its 49 percent stakes in gas supplier EPA Attiki and gas distributor EDA Attiki, both covering the wider Athens region, to DEPA.

Shell received a total of 150 million euros, 39 million for its 49 percent stake in EPA Attiki and 111 million euros for its 49 percent stake in EDA Attiki.

The company’s reemergence can be primarily attributed to an interest in DEPA’s long-term contracts with Gazprom, Sonatrach and Botas, with an eye on the wider Balkan and southeast European regions, sources said.

PPC and Motor Oil decided to join forces for the DEPA Trade sale as a result of the failure of both to secure slots for 2020 at gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens. PPC holds a 30 percent stake in its partnership with Motor Oil, sources informed.

Following its Revythoussa failure, PPC has been more aggressive in a market test for the Alexandroupoli FSRU, expiring today. PPC wants to secure a capacity at this prospective unit in the country’s northeast as the company is determined to have LNG access. A successful bid in the DEPA Trade sale would bolster this position.

Hellenic Petroleum (ELPE) and Edison did not submit a joint bid for DEPA Trade through Elpedison, their joint venture for Greece’s retail energy market, as had been speculated. Instead, they are believed to have made separate bids. The two had not shaped a common action plan in the event of a successful DEPA Trade bid, sources said. However, the establishment of a new joint venture by the two firms at a latter stage, specifically for DEPA Trade, cannot be ruled out.

The country’s planned privatizations, including DEPA Trade, face likely delays as a result of the coronavirus pandemic’s repercussions. The progress of these sales will depend on the course of the pandemic.

DEPA Trade’s first-round bidders forwarded their offers on-line and must follow up with deliveries of official documents by April 24. The evaluation of first-round offers is not expected to begin any sooner than April 25.

DEPA Trade offers due today, at least 7 players interested

Five Greek and two international investment groups are expected to submit bids for the DEPA Trade privatization, whose first-round deadline expires today at 5pm.

DEPA Trade was established as a new gas utility DEPA entity for the privatization, offering the Greek State’s 65 percent stake.

Bidders may also submit their expressions of interest online, via email, as a result of restrictive measures prompted by the coronavirus crisis, but will need to follow-up with official documents by April 24. The evaluation of first-round offers is not expected to begin any sooner than April 25.

The local bidders expected to submits bids, all leading energy players, are Mytilineos, GEK Terna, Motor Oil, Hellenic Petroleum (ELPE) and the Copelouzos group.

ELPE plans to submit a joint bid in partnership with Edison, possibly through Elpedison, their joint venture for Greece’s retail energy market, sources informed.

The Copelouzos group is also working on delivering a joint offer, with Czech firm KKCG.

Shell is among the foreign companies looking interested, despite its sale, two years ago, of stakes in DEPA gas supply and distribution companies.

Dutch firm Vitol is the other foreign player believed to have been drawn to the DEPA Trade sale. Vitol had reached the final stage of an ELPE sale with Algeria’s Sonatrach as a bidding partner, but the pair ended up not submitting a binding offer.

Expressions of interest in DEPA Trade may also come from Swiss-based Hungarian firm Met Energy Holding, active in natural gas wholesale trade. This firm is already present in Hungary, Croatia, Italy, Serbia, Slovakia, Spain, Turkey and Ukraine. Qatar’s Power Global is another possibility.

DEPA Trade’s portfolio includes 409,000 customers – households and businesses.

 

No date change, at present, for DEPA Trade privatization effort

No further scheduling revisions are intended – at present – for the DEPA Trade privatization procedure, whose first-round deadline has already been reset for March 23, government officials have told energypress.

Officials at privatization fund TAIPED are concerned the coronavirus crisis could impact the sale and subdue bidding interest.

DEPA Trade was established as a new gas utility DEPA entity for the privatization, offering the Greek State’s 65 percent stake.

The DEPA Trade privatization procedure can move ahead as planned because the aforementioned deadline has already been extended once and is non-binding, the energy ministry has contended, adding extension requests are limited to a very small number of investors.

Essentially, the ministry, and government as a whole, are determined to avoid any sale delays as this would reinforce the picture of a halt in economic activity.  The government sees the next fortnight as a crucial period for the coronoavirus preventive measures and economy.

Subdued interest by prospective bidders, including funds and consortiums, cannot be ruled out as Greece is still regarded as a high-risk market. These concerns also apply for the country’s two other upcoming major privatizations concerning DEPA Infrastructure and Athens International Airport.

 

Market slump a worry for DEPA Trade sale, gov’t holds firm

Privatization fund TAIPED and the energy ministry, already into the early stages of a sale offering the Greek State’s 65 percent of DEPA Trade, a new entity formed by gas utility DEPA for its privatization, are keeping a close watch on international markets, battered amid fears prompted by the coronavirus spread around the world.

The DEPA Trade sale, an emblematic energy-sector privatization, had already been given a first-round deadline extension for non-binding bids, until March 23, prior to the latest coronavirus-related market concerns. But the worsening international conditions, which prompted markets to plunge on Monday, have made the DEPA Trade sale’s officials far more vigilant.

Though an improvement of market conditions by the DEPA Trade privatization’s March 23 non-binding deadline cannot be ruled out, authorities are certainly  concerned for a number of reasons.

DEPA Trade does not offer investors secured WACC levels, as is the case with networks and infrastructure, including DEPA Infrastructure, power grid operator IPTO and distribution network operator DEDDIE/HEDNO. This absence of a fixed yield makes DEPA Trade’s value susceptible to international and domestic market turmoil.

Also, far lower LNG prices at present represent an unfavorable development for DEPA Trade as the company is committed to pipeline natural gas import agreements with take-or-pay clauses. This restricts the firm’s ability to choose.

In addition, investors, local and foreign, inevitably revise investment plans, or, at best, wait, when faced by overwhelming situations such as the coronavirus outbreak.

Furthermore, any market-slump period is not a good time to sell assets. Should markets remain unsettled for an extended period, the market value of DEPA Trade will be impacted.

The government plan remains unchanged, the DEPA Trade privatization still being at an early stage, energy ministry officials told energypress.

 

DEPA Trade sale threatened by unfinished ELFE pricing case

An unfinished legal battle between gas utility DEPA and ELFE (Hellenic Fertilizers and Chemicals), recently vindicated by an Athens Court of First Instance verdict calling for a 63 million-euro return from the gas utility for gas supply overcharging, threatens to block the launch of a privatization offering 65 percent of DEPA Trade, a new DEPA entity established for the privatization, despite strong investor interest.

The Court of First Instance decision in favor of ELFE, delivered four months ago, is a major blow for DEPA’s finances as the sum could potentially balloon if other firms follow the example set by ELFE and also take legal action, authorities have stressed.

The court ruled that DEPA overcharged ELFE between 2010 and 2015 by applying an oil-indexed gas pricing formula used by Russia’s Gazprom.

DEPA is expected to win an appeal as the utility is backed by a strong case, sector experts have pointed out.

If, however, ELFE ultimately proves these predictions wrong and wins the case then other companies supplied by DEPA, including electricity producers, would be prompted to take legal action of their own against the utility, taking advantage of the legal precedent. This would require DEPA to return sums worth hundreds of millions of euros, in addition to the ELFE amount.

Subsequently, the DEPA Trade sale cannot proceed with such ambiguity hanging in the air as prospective bidders will simply not turn up and submit binding bids if all is not clear.

Additional IPTO stake seen offered within next three months

The government, gearing up for a series of energy sector privatizations, plans to hasten the sale of an additional yet unspecified stake in power grid operator IPTO. The procedure could now be launched within the next three months.

Investor interest in IPTO has risen as the operator’s asset value is projected to increase sharply over the next decade.

The Greek State currently controls a 51 percent share of IPTO, directly and indirectly. Late in 2019, State Grid Corp of China (SGCC), the buyer of a 24 percent stake in IPTO and holder of priority rights should any additional stake be offered, expressed an interest to boost its stake in the operator and also acquire a 20 percent stake in subsidiary firm Ariadne Interconnector, project promoter of the Crete-Athens electricity grid interconnection, a project budgeted at one billion euros.

The size of the additional IPTO stake to be placed for sale remains unclear, but, without a doubt, SGCC’s decision on whether or not to exercise its priority right will be influential.

Italy’s Terna, holding a 30 percent stake in CDP Reti, an Italian holding company, is also believed to be interested in the upcoming IPTO sale. SGCC would also be involved here as the Chinese company holds a 35 percent stake in CDP Reti. French operator RTE and a variety of funds are also considered believed to be considering the IPTO sale.

IPTO’s assets are seen rising from a present level of 1.5 billion euros to five billion euros over the next ten years as a result of the development of major grid interconnection projects to link the country’s Dodecanese and North Aegean Islands with the mainland.

Greece’s energy-sector privatizations will not be limited to gas utility DEPA’s two new entities, DEPA Infrastructure and DEPA Trade, both underway, nor will there be a gap until the next sale, distribution network operator DEDDIE/HEDNO, scheduled for September, energy ministry officials have informed. The Hellenic Petroleum ELPE sale will be deferred.

 

‘DEPA key to Greece’s leading Balkan role, energy diversification’

Greek gas utility DEPA chief executive Konstantinos Xifaras met earlier today with the U.S. Ambassador to Greece, Geoffrey Pyatt (photo), for a meeting focused on the recent energy-related developments in Southeast Europe as well as on the progress of significant projects in the wider region, currently under way or in design phase, such as the IGB pipeline, the Alexandroupoli FSRU and the EastMed pipeline, a project of strategic importance.

Following the meeting, Ambassador Pyatt remarked: “Greece is a leader in the Balkans in providing energy security and diversification of energy sources, and DEPA is key to its strategy. The U.S. therefore strongly supports DEPA’s participation in major projects that advance this strategy, particularly the Alexandroupoli FSRU, the IGB, TAP and potential EastMed pipeline, which are literally changing the energy map of Europe. These projects are critical for regional peace and security and will make Greece a regional energy hub.”

The DEPA chief commented: “We discussed, with the Ambassador, the course of significant energy projects currently under way in our region, in which DEPA has a leading role.  Over the past months, our company has striven to strengthen its position in the regional energy market, achieving notable cost reductions as well as expanding its activities in new sectors and products. At the same time, we remain focused on the double privatization [DEPA Trade, DEPA Infrastructure] and we are upgrading our participation in these international projects developing Greece into a regional energy hub, safeguarding, at the same time, the diversity of supply sources to the benefit of the country and consumers.”

 

ELPE not on 2020 privatizations list despite priority status, unclear why

The schedule for the Greek State’s sale of its 35.47 percent stake in Hellenic Petroleum (ELPE) remains unclear despite this privatization being declared a priority by the New Democracy government immediately following its election victory last summer.

Speaking yesterday at an energy conference, Athens Energy Dialogues, energy minister Costis Hatzidakis offered a rundown of the government’s planned privatizations for 2020. ELPE was not on the list.

Signs of a slowdown in the ELPE plan emerged in early autumn when energy minister Costis Hatzidakis requested patience from investors for this particular sale. Ministry officials reiterated this call for patience yesterday.

Towards the end of 2019, the privatization fund TAIPED declared that its 2.4 billion-euro revenue target for 2020 would be achieved as a result of a series of planned privatizations.

TAIPED, at the time, included the ELPE sale on its privatization agenda for 2020, along with Athens International Airport and the two new gas utility DEPA entities, DEPA Trade and DEPA Infrastructure.

Some pundits have attributed the government’s ELPE delay to a decision by the Latsis Group, ELPE’s main shareholder with a 45.48 percent share, not to sell and not wish the entry of any new investor into the petroleum group’s equity make-up.

Certain industry experts have gone as far as to say that the ELPE privatization has been cancelled.

Others are attributing the ELPE sale delay to the launch of the DEPA Trade and DEPA Infrastructure privatizations. ELPE holds a 35 percent stake in DEPA and these new entities, established to serve the DEPA privatization.

Also, less favorable international conditions at present cannot be overlooked. Hatzidakis, the energy minister, has, from early on, been adamant on selling at the right time, when international conditions are at an optimal level.

Improved Gazprom deal raises DEPA in the eyes of investors

Lower-price deals sealed or about to be sealed between gas utility DEPA and its international suppliers are among the factors the government is relying on for a successful privatization procedure of the gas utility, a procedure launched yesterday, beginning with DEPA Trade, one of DEPA’s two new entities formed for the sale.

DEPA is believed to have renegotiated a far more favorable supply deal with Russia’s Gazprom, the Greek utility’s biggest supplier.

Forty percent of DEPA’s natural gas orders from Gazprom will no longer be pegged to fluctuating international oil prices. Instead, this percentage of DEPA’s Gazprom orders will be linked to price levels of Dutch gas trading platform TTF, one of Europe’s biggest hubs. Just days ago, prices at TTF were about half those of pipeline gas. The other 60 percent of DEPA’s orders with Gazprom will remain oil indexed.

This development promises to make DEPA’s supply deals with Gazprom far more competitive. Prospective bidders already appear to be warming to the prospect.

Major Greek corporate groups such as Mytilineos, Hellenic Petroleum (ELPE) – already holding a 35 percent stake in DEPA and considering teaming up with its Elpedison partner Edison for the DEPA sale – GEK Terna and Motor Oil are believed to be gearing up for bids. The Copelouzos group’s involvement in the DEPA Trade sale is considered certain – in a partnership with Czech entrepreneur Karel Komarek, holding a key stake in Greek lottery OPAP.

Elpedison partners still undecided on joint bid for DEPA Trade

Hellenic Petroleum (ELPE) and Italy’s Edison, co-owners of energy company Elpedison through a successful 50-50 joint venture, have yet to decide whether they will submit a joint bid for DEPA Trade, a new entity formed by gas utility DEPA as part of its privatization.

The two partners, who now fully own Elpedison following last June’s departure by Ellaktor (22.73%) and Elvalhalcor (1.48%), are keen to place greater emphasis on energy production and retail supply growth at their venture, both in electricity and natural gas.

Investors will be offered the Greek State’s 65 percent stake in DEPA Trade. ELPE controls the other 35 percent.

Elpedison officials have held preliminary talks on the DEPA Trade sale but decided to delay a decision for later on, energypress sources informed. Privatization fund TAIPED has not yet launched the DEPA Trade sale. Bidders are expected to face a March deadline.

The Elpedison partners are believed to have tabled contrasting approaches in their effort to make a joint bid for ELPE Trade, according to some sources. However, both sides have hinted that a solution can be found. An announcement on final decisions will not take long, company officials told energypress.

Both sides have rejected rumors of a breakdown in talks and preparations for separate bids.

If they unite and submit the winning joint bid for DEPA Trade, the ELPE and Edison officials will need to forge a unification plan bringing together DEPA Trade and Elpedison.

 

DEPA Trade sale launch near, Middle East tension a concern

The launch of a privatization procedure offering 100 percent of DEPA Trade, a new entity established by gas utility DEPA for the sale, is near, as long as the heightened tension in the Middle East does not lead to extreme events and turbulent market conditions.

Officials at privatization fund TAIPED and the energy ministry are aiming for a start before the end of January, while, according to some sources, the sale’s launch may take place at the end of next week.

The heightened tension in the Middle East is a concern for the organizers of this privatization as extreme developments could unsettle oil and gas markets to an extent that would render the current period unsuitable for the DEPA Trade sale. If so, officials may need to delay the sale’s launch.

TAIPED and Hellenic Petroleum (ELPE), holding a 35 percent stake in DEPA, are close to reaching an agreement on the sale process of this stake should ELPE not emerge as the sale’s winning bidder. The petroleum group intends to seek a full acquisition in the DEPA sale. The details of a clause requiring ELPE to sell its stake, if the group fails to submit the winning bid, are now being worked on.

The agreement between TAIPED and ELPE will need to be endorsed by the boards of both entities.

 

 

DEPA, ELPE, south Kavala gas storage privatizations in 2020

The privatizations of gas utility DEPA – through two separate tenders offering the utility’s trade and infrastructure divisions that have resulted from a split designed for the sale – as well as the Greek State’s 35.48 percent stake in Hellenic Petroleum (ELPE), stand as the major sales planned by privatization fund TAIPED in 2020.

TAIPED also plans to push ahead with a tender for the conversion of a depleted natural gas field in the offshore South Kavala region into an underground gas storage facility in the New Year.

The DEPA and ELPE privatizations are expected to raise one billion euros from a target of 2.4 billion euros set for 2020. If achieved, this amount will represent a new privatization revenue record for TAIPED.

The DEPA Infrastructure tender is already in progress. Participants are due to express non-binding interest by February 14. The DEPA Trade tender is expected to be launched within January. TAIPED is confident both these sales can be completed in 2020.

A planned privatization to offer a 30 percent stake in Athens International Airport ranks as TAIPED’s other major sale plan for 2020. The Greek State currently holds a 55 percent stake in Athens International Airport S.A. or AIA, the airport authority that owns and manages Athens International Airport.

DEPA Infrastructure sale first-round deadline set for Feb.14

Interested buyers of DEPA Infrastructure, a new entity emerging from a split at gas utility DEPA, have until February 14 to express non-binding first-round interest in its sale, offering the entire stake, the privatization fund TAIPED has announced.

TAIPED is selling the Greek State’s 65 percent stake and Hellenic Petroleum has contributed its full 35 percent stake.

Strategic investors as well as investment funds seeking strong yields have already displayed strong interest in the sale, TAIPED sources have informed media.

Procedures concerning the privatization of DEPA’s other new entity, DEPA Trade, are expected to begin in the first quarter of 2020. It remains unclear whether ELPE will contribute its 35 percent DEPA stake to this sale. ELPE has noted it will seek to take full control of this new company by acquiring the other 65 percent.

Greek groups, all involved in the energy sector, and foreign groups, some of which have already entered the country’s energy market, are interested in DEPA Trade, TAIPED sources added.

Alexandroupoli FSRU 2nd-round market test ready for launch

Gastrade, heading an effort for the development of an FSRU in Alexandroupoli, northeastern Greece, is preparing to launch a binding second-round market test.

RAE, the Regulatory Authority for Energy, has approved the procedure’s finalized texts concerning participation terms and conditions, indicative tariffs, schedules and a capacity reservation model for the LNG terminal.

The second-round market test could be completed by the end of January, it is anticipated. This would pave the way for a final investment decision by the company while a concurrent effort is made to finalize the venture’s equity make-up.

Besides the Copelouzos group, the venture’s initiator, GasLog, active in LNG transportation, is also on board with a 20 percent stake. A final decision by gas utility DEPA on its participation, also with a 20 percent stake, remains pending.

DEPA’s prospective involvement in the Alexandroupoli FSRU project, considered a certainty, has been passed on to DEPA Trade, a new entity established in preparation for DEPA’s privatization.

A final decision by Bulgarian Energy Holding (BEH) concerning its possible entry with a 20 percent stake is also pending.

An effort offering the remaining 20 percent is in progress. Candidates include Romgaz, Romania’s biggest natural gas producer and main supplier in the domestic market. The company’s shareholders recently voted to enter the Alexandroupoli FSRU project.

“We are very optimistic. We believe we will do better than what we need to in order to make the final investment decision,” Gastrade’s chief executive Costis Sifneos noted recently.

Greece’s decarbonization program, announced recently by the government, will bring about major changes to the country’s energy mix, according to Sifneos. He expects the domestic natural gas market to grow from its current size of 4.5 billion cubic meters, annually, to 7 billion cubic meters over the next 5 to 7 years.

The Greek gas market has grown by 17 percent this year alone, while, for the first time, LNG quantities exceeded pipeline gas.

DEPA Infrastructure sale to be announced mid-December

Privatization fund TAIPED is preparing swift privatization action at gas utility DEPA to follow the government’s ratification of a restructuring plan at the company that will place for sale two new corporate entities, DEPA Trade and DEPA Infrastructure, emerging through this process.

A tender offering investors the Greek State’s 65 percent of DEPA Infrastructure – resulting from the Greek State’s equivalent stake in DEPA – will be announced no later than December 15, according to energypress sources.

Hellenic Petroleum ELPE’s 35 percent stake – resulting from the Greek State’s equivalent stake in DEPA – is expected to be included in the DEPA Infrastructure sale, sources noted. The petroleum group has indicated it is not interested in maintaining interests in DEPA Infrastructure. If this is so, then the potential buyer or buyers of DEPA Infrastructure will become full owner.

DEPA Infrastructure is the full owner of Attiki gas distributor, covering the wider Athens area, and DEDA, covering the rest of Greece. DEPA Infrastructure also holds a 51 percent stake in distributor EDA Thess (Thessaloniki and Thessaly). Italy’s ENI is the minority partner in this venture.

DEPA Infrastructure, through all its interests, has lined up a five-year investment program worth 250 million euros. Revenues at DEPA Infrastructure are regulated and worth a total of approximately 130 million euros.

Italy’s Italgas and Germany’s E.ON are believed to be among the potential bidders for DEPA Infrastructure. Belgium’s Fluxys and Spain’s Enagas, both part of a three-member consortium controlling Greek gas grid operator DESFA, may also participate in the DEPA Infrastructure sale.

The announcement of a sale procedure for DEPA Trade will follow and is expected by the end of January.

ELPE is not expected to offer its 35 percent stake to this sale, meaning bidders will most probably be bidding for the Greek State’s 65 percent.

The Mytilineos group, Motor Oil and a partnership comprised of Copelouzos and KKCG, the Czech company holding a stake in Greek lottery company OPAP, are seen as likely participants in the privatization fund’s ELPE Trade sale. International players ENI and Edison have also been mentioned by pundits.

 

Italian energy firms eyeing array of local investments, PM in Italy

Italian investors are displaying widespread interest for energy investments in the Greek market, including possible stakes in distribution network operator DEDDIE/HEDNO, power grid operator IPTO, gas utility DEPA’s two new entities DEPA Trade and DEPA Infrastructure, as well as joint ventures in wind energy stations, electric vehicle projects and smart grids.

Deputy energy minister Gerassimos Thomas, joining Prime Minister Kyriakos Mitsotakis on an official visit to Rome today, is expected to be informed of this Italian investment interest. Thomas is scheduled to meet with Italian economic development minister Stefano Patuanelli.

The Greek Prime Minister, to meet with his Italian counterpart Giuseppe Conte, can also expect to hear of this Italian investment interest during talks which, besides the refugee crisis, will also address cross-border energy projects such as TAP and East Med.

Snam maintains the most emblematic of Italian investments in the Greek market at present with a 66 percent stake in gas grid operator DESFA, including control of the country’s natural gas transmission and storage infrastructure.

Italian firms are regarded as pioneers in a number of green-energy domains, including smart grids, electric vehicle recharging station installations along highways, even wave power projects.

Just days ago, a consortium comprising Eni, Fincantieri and Terna announced it would commercially develop its pilot project Inertial Sea Wave Energy Converter (ISWEC) for wave energy generation, initially at small Italian islands, followed by projects abroad.

The Greek Prime Minister and his energy deputy will also meet with Italian entrepreneurs, including Eni gas e luce chief executive Alberto Chiarini.

Italy’s Terna, one of Europe’s biggest transmission system operators, is believed to be interested in acquiring a stake of IPTO and its Ariadne subsidiary, project promoter of the submarine Crete-Athens grid interconnection.

Enel is considering moves into networks, renewable energy investments and the electric vehicles sector.

Italgas, Italy’s biggest gas distributor and the continent’s third biggest, appears interested in DEPA Infrastructure. Italgas is believed to have reached a preliminary agreement to acquire fellow Italian company Eni gas e luce’s 49 percent stake and management rights in EDA Thess, covering the Thessaloniki and Thessaly areas.

Eni, increasing its involvement in pioneering projects, including wave energy, is believed to be looking to increase its Greek market presence, possibly through acquisitions.

 

 

Italgas eyeing Eni’s 49% stake in EDA Thess, DEPA networks

Italgas, Italy’s biggest natural gas distributor, appears to have reached a preliminary agreement to acquire fellow Italian company Eni gas e luce’s 49 percent stake and management rights in EDA Thess, covering the Thessaloniki and Thessaly areas.

Though Eni maintains a favorable view of its business interests in EDA Thess, the retail-focused company’s involvement in networks is not its main international activity. EDA Thess is the sole gas distribution company in Eni’s portfolio.

Privatization procedures at Greek gas utility DEPA appear to have hastened the development. DEPA’s 51 percent stake in EDA Thess is set to be transferred to DEPA Infrastructure, one of two new entities, along with DEPA Trade, to emerge from a DEPA split ahead of the gas utility’s privatization.

The government is moving to privatize the Greek State’s prospective 65 percent in DEPA Infrastructure. The entire company may be sold if Hellenic Petroleum (ELPE), a 35 percent shareholder, joins this privatization.

Italgas is preparing to participate in the DEPA Infrastructure tender once it has acquired – if all goes well – Eni’s stake in EDA Thess, sources informed.

Eni gas e luce is awaiting Greek market developments and will then examine its options concerning the EDA Thess stake, including a possible sale, company officials have responded to media questions, without confirming any finalized deal.

Speaking to Reuters last week, Italgas chief Paolo Gallo informed the company intends to finalize a merger and acquisition agreement by the end of the year, or, possibly, in the first quarter of 2020.

 

Local players dividing interest for DEPA trade, network units

The country’s major energy sector players are more or less split in their investment interest for DEPA Trade and DEPA Infrastructure, the two new entities to emerge from gas utility DEPA’s privatization plan, but the overall interest for DEPA Trade appears to be more substantial.

The Mytilineos group, Motor Oil and the Copelouzos group have already expressed interest in DEPA Trade and will probably submit bids once the  tender is staged. Hellenic Petroleum ELPE, holding a 35 percent stake in DEPA, is also expected to express interest in DEPA Trade.

The emergence of foreign bidders cannot be ruled out as Greece’s natural gas market is gaining prominence as a hub for the wider region in southeast Europe.

As for the gas utility’s networks, Italy’s Eni, maintaining interests in the trade and distribution markets of Thessaloniki and the Thessaly region, is reported to be interested in DEPA Infrastructure. GEK Terna is also believed to be seriously considering this entity’s gas distribution prospects.

Besides the level of bids, the energy ministry will also take into account the respective business plans to be submitted by investors to the DEPA Infrastructure tender, the objective being to secure further network expansion covering new regions.

Details and procedures concerning the DEPA privatization plan have been included in a draft bill to soon be delivered to Greek Parliament. In the lead-up, the plan will be presented for public consultation, possibly beginning today.

Unlike the previous government’s plan, the Greek State’s entire 65 percent stake in DEPA will be offered through the two new entities.

The DEPA Trade and DEPA Infrastructure tenders are expected to be staged concurrently.

 

 

Besides PPC, hiring, pay limits to also be eased at subsidiaries

Besides the power utility PPC, rigid recruitment regulations set by ASEP, the Supreme Council for Civil Personnel Selection, will also be eased for subsidiaries DEDDIE/HEDNO, the distribution network operator, and PPC Renewables.

The new terms, to also include a relaxation of remuneration and procurement restrictions, are part of a wide-reaching draft bill to be presented by the energy ministry’s leadership at a Ministerial Council meeting today.

The energy ministry is determined to distance both PPC and its subsidiaries from bailout-related restrictions imposed on public-sector enterprises.

However, the draft bill will not include privatization-plan details for DEDDIE, whose model and procedures will be shaped within the framework of a new PPC business plan being prepared and expected to be completed within December, sources informed.

A finalized decision has been reached on gas utility DEPA’s privatization plan. The corporation will be split into two new entities, DEPA Trade and DEPA Infrastructure, and the Greek State’s entire 65 percent stake will be privatized. Hellenic Petroleum ELPE controls DEPA’s remaining 35 percent.

Also, DEPA’s international projects will be removed from the utility and incorporated into a new autonomous state-controlled company. The gas utility’s international projects include its stakes in the IGB and Poseidon pipelines, plus Memorandums of Cooperation and agreements, such as the Alexandroupoli FSRU plan.

The draft bill does not appear to include any terms on the futures of DEPA employees and sub-contracted staff members.

DEPA shape almost set, issues remain on FSRU, Int’l projects

Gas utility DEPA’s restructured look ahead of its privatization is detailed in an energy sector draft bill to be discussed by the Ministerial Council at a meeting scheduled for tomorrow.

The sale of the Greek State’s entire stakes in two new entities to emerge from DEPA’s planned split into DEPA Trade and DEPA Infrastructure is now considered a certainty.

However, two key issues remain unresolved. The government has yet to decide on whether DEPA’s planned 20 percent buy into Alexandroupoli FSRU, considered most likely, will end up with DEPA Trade. This ambiguity also applies for the project’s capacity reservation to be made by the utility. DEPA’s anticipated 20 percent stake in the Alexandroupoli FSRU could be attached to DEPA Infrastructure and the capacity reservation to DEPA Trade.

The addition of a 20 percent stake of the Alexandroupoli FSRU to DEPA Trade promises to boost the corporate entity’s value in the upcoming privatization.

The second major issue at DEPA concerns the corporate placement of the utility’s international projects. They could end up becoming part of an existing state company, such as EDEY, the Greek Hydrocarbon Management Company, or a new company. The latter option is likeliest, as an EDEY attachment carries various complexities, sources informed.

 

DEPA examining Alexandroupoli FSRU stake, role in privatization

Gas utility DEPA is contemplating its entry into the equity line-up of an FSRU planned for Alexandroupoli, northeastern Greece, and, if so, whether this stake would be incorporated into DEPA Trade or DEPA Infrastructure, two new divisions to emerge ahead of the utility’s upcoming privatization.

DEPA’s stake in the Alexandroupoli FSRU, expected to be 20 percent, would make a good selling point for DEPA Trade ahead of the privatization. Finalized decisions by the DEPA board are expected soon. Neighboring Bulgaria’s liberalized gas market, in which DEPA already enjoys a presence, will be taken into account.

A project budgeted at 380 million euros, the Alexandroupoli FSRU, promoted by Gastrade, has reached a very mature investment phase. The unit is planned to be moored 17.6 kilometers southwest of the Alexandroupoli port.

According to the project plan, the facility’s LNG storage capacity will be between 150,000 and 170,000 cubic meters, while LNG regasification will be performed at the FSRU and then transported to mainland pipelines via a 28-kilometer pipeline, of which 24 kilometers will be under water.

The details of the DEPA Trade and DEPA Infrastructure privatizations still remain uncertain. According to some sources, both procedures could be staged concurrently and offer investors as much as 65 percent of each division, in other words, the Greek State’s entire stake in DEPA. Hellenic Petroleum ELPE owns the other 35 percent of DEPA.

Concurrent DEPA infrastructure, trade unit sales being planned

Privatization fund TAIPED plans to stage concurrent tenders offering stakes of up to 65 percent in DEPA Trade and DEPA Infrastructure once legislation has been ratified to enable gas utility DEPA’s split into these two new corporate entities.

The Greek State holds a 65 percent stake in DEPA, while Hellenic Petroleum ELPE holds the other 35 percent.

The Greek State’s entire stake in DEPA – both infrastructure and trade – could be offered to investors, energy minister Costis Hatzidakis noted yesterday.

A DEPA draft bill enabling the sale of the Greek State’s entire share will be submitted to Greek Parliament within October, along with power utility PPC revisions and a wider framework for more extensive energy market liberalization, the minister added.

The level of the Greek State’s DEPA stake to be privatized will be determined once ELPE decides on the future of its 35 percent share in the gas utility.

It is believed ELPE could sell its stake in DEPA Infrastructure and seek control of the gas utility’s trading interests.

Aggressive DEPA privatization in making, draft bill next month

Gas utility DEPA’s state-controlled era appears to be reaching its end as the energy ministry is looking to privatize the Greek State’s entire stake in the utility’s trading and infrastructure interests.

The Greek State – via privatization fund TAIPED – holds a 65 percent stake in DEPA, with Hellenic Petroleum ELPE owning the other 35 percent.

DEPA is at the forefront of the recently elected conservative New Democracy government’s privatization program, sources informed.

The Greek State’s interests in DEPA Trade and DEPA Infrastructure – the two new corporate entities formed through a DEPA spit plan engineered by the former Syriza government’s energy minister Giorgos Stathakis – will be completely withdrawn, the sources noted.

The former government was planning to offer a majority stake of DEPA Trade followed by a minority stake of DEPA Infrastructure.

Required legislation needed to proceed with the revised DEPA plan will be attached to a draft bill concerning changes at power utility PPC, expected in parliament early next month.

The DEPA legislative revisions will enable a complete transfer of the Greek State’s 65 percent stake in DEPA Trade to the privatization fund. Current law permits the transfer and sale of 50 percent plus one share.

The transfer to TAIPED of a 66 percent share of the Greek State’s stake in DEPA Infrastructure is also being planned, according to some sources, while others have not ruled out a full 100 percent transfer. The previous government had ratified law limiting DEPA Infrastructure’s privatization to less than 49 percent.

Sources have informed of yet another change in the making that entails the establishment of a new company and transfer, to it, of DEPA’s stakes in pipeline projects such as the IGB, Poseidon, East Med and IGI. Current law obligates such a company to remain a part of DEPA Infrastructure.

All these changes are expected to be finalized within the next few days.

Energy ministry pushing for swift completion of DEPA privatization

Swift completion of gas utility DEPA’s privatization procedure is a key objective for the energy ministry, whose choice of sale model will be strongly influenced by the time needed for implementation.

Opting to continue with the previous Syriza government’s unfinished DEPA sale procedure, instead of adopting a more recent New Democracy administration proposal that would entail the establishment of a holding company, appears to be the likeliest way to go, energy ministry sources have underlined.

Energy ministry and privatization fund TAIPED officials, along with legal consultant Potamitis Vekris and financial adviser UBS, held a meeting yesterday to discuss the DEPA privatization.

The previous government’s DEPA sale plan, involving a company split designed to offer investors separate stakes in two new entities, DEPA Trade and DEPA infrastructure, appears to be the favored option at this stage, with one big difference, this being to offer majority 65 percent stakes in each of the two new companies.

Under the Syriza version, investors would have been offered a majority 50.1 percent stake of DEPA Trade and 14 percent minority stake of DEPA infrastructure.

The government’s newer and less likely option, entailing the establishment of a holding company as a platform for two to three companies representing DEPA’s trading, network and international activity interests, has not been completely ruled out.

The recently elected government wants the DEPA privatization to be among its first sales. It intends to launch a tender in autumn for completion as soon as possible.