Rescue talks for Prinos, Greece’s only producing field, making progress

Talks between Energean Oil & Gas and officials at the energy and economy ministries for a solution to rescue offshore Prinos, Greece’s only producing field in the north, are making progress, sources have informed.

Heightened Turkish provocations in the Aegean Sea over the past few days – the neighboring country sent a survey vessel into Greece’s EEZ – and greater US presence in the wider southeast Mediterranean region, are two developments that have injected further urgency into the Prinos field rescue talks.

The east Mediterranean is at the core of geopolitical developments that promise to create new political and energy sector conditions.

US oil corporation Chevron, America’s second-biggest energy group, has joined fellow American upstream giant ExxonMobil in the east Mediterranean with a five billion-dollar acquisition of Noble Energy.

This takeover by the California-based buyer adds to the Chevron portfolio the gigantic Leviathan gas field in Israel’s EEZ, as well as the Aphrodite gas field, situated within the Cypriot EEZ and estimated to hold 4.5 trillion cubic feet.

It also offers Chevron prospective roles in the East Med pipeline, to supply Europe via the Leviathan field, and Egypt’s LNG infrastructure, all elevating the petroleum group into a dominant regional player.

Israel and Cyprus recently ratified the East Med agreement, as has Greece, while Italy appears to be examining the prospect.

In another regional development, the Total-ENI-ELPE consortium is preparing to conduct seismic surveys at licenses south and southwest of Crete, and an environmental study southeast of Crete has been approved by Greek authorities. Also, oil majors with interests in Cyprus’ EEZ have planned a series of drilling operations for 2021.

Meanwhile, Turkey, trespassing into both Greek and Cypriot EEZ waters, consistently cites a memorandum recently signed with Libya as support for its actions, as well as its refusal to sign the UN’s International Law of the Sea treaty, strongly disagreeing with an article that gives EEZ and continental shelf rights to island areas.

Greek government officials are well aware that closure of the Prinos field amid such precarious conditions would lead to major consequences, not just economic and social, as would be the case under normal conditions, but also geopolitical.

Oil drilling plans on hold, forced by price collapse, pandemic

Preliminary hydrocarbon exploration work planned by oil companies at licenses in the Ionian Sea and south of Crete is being postponed for an indefinite period that could last as much as a year, possibly more.

Upstream players are revising plans as a result of the collapse in oil prices and the coronavirus pandemic, a double setback for the sector.

Worse still, investment conditions for the Ionian Sea and Crete areas are made even more challenging by the fact that neither has yet to reveal sustainable fields.

In addition, both Greek zones are deep-sea areas of depths ranging from 2,500 to 3,000 meters, making exploration a high-cost venture.

Global oil majors are reducing investments and expenses by the billions in response to the unfavorable market conditions that have emerged over the past couple of months.

Fields with proven reserves have not been spared, which pushes untested fields such as those in Greece even further down the priority list.

The resumption of drilling ventures still at preliminary stages is not likely until oil prices rebound, energy minister Costis Hatzidakis noted in an interview with Greek daily To Ethnos.

It is a similar picture for Cyprus. The Eni-Total consortium yesterday announced it is postponing oil drilling activities in Cyprus’ Exclusive Economic Zone until March or April next year.

PPC expects major LNG tender turnout for 2.7 million MWh

Gas suppliers are expected to turn up in numbers for a power utility PPC tender expiring today with offers to provide three LNG shipments needed by the utility between March and May. PPC plans to purchase a total of 2.66 million MWh through this tender.

Between nine and ten gas suppliers, including major Greek and foreign LNG players, will submit offers, PPC has been informed, according to energypress sources.

Besides leading Greek gas traders, the procedure is expected to attract companies such as Rosneft, Eni Trading, Gunvor, Glencore, Shell, Cheniere and Tellurian.

All participants were required to sign Master Sale Agreements, committing them to their offers without any revisions.

PPC wants a first LNG shipment of 900,000 MWh on March 24, a second delivery of 815,000 MWh on April 21 and a third of 950,000 MWh on May 20.

Today’s tender confirms a change of strategy by PPC, searching markets around the world, from Asia to Qatar and the USA to Russia, for low-priced LNG.

The continual drop in LNG prices promises major cost savings for a company the size of PPC, requiring 1.35 bcm per year.

 

Athens wants greater French hydrocarbon engagement

The government wants France’s Total to play a more active role in Greek offshore hydrocarbon exploration, Prime Minister Kyriakos Mitsotakis made clear during a meeting in Paris yesterday with the French group’s chief executive Patrick Pouyanné.

The potential of Greece’s hydrocarbon market, including offshore licenses south and southwest of Crete held by a Total-led consortium – it also features Exxon Mobil and Hellenic Petroleum (ELPE) – was the main focus of yesterday’s meeting.

Processing of seismic data collected from the Cretan offshore blocks has provided strong evidence of a deposit sharing similar attributes to Egypt’s Zohr gas field. However, this needs to be proved in practice. French officials have remained cautiously optimistic as they await initial drilling operations for a clearer picture.

Total’s plans for exploration within the Cypriot Exclusive Economic Zone, specifically at Block 8, for which Total shares a license with Italy’s Eni, were also discussed yesterday.

Turkish drillship Yavuz has sought to engage in illegal exploration activities in this area. French officials do not intend to intercept any Turkish moves at this stage but are expected to do so if the exploratory rights of Total and Eni are disputed once the companies decide to start exploring the area.

 

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.

 

 

EGL’s Zenith buy exceeding business objectives, further growth sought

Italian enterprise EGL’s (Eni gas e luce) decision to fully acquire the Zenith gas and electricity supply company, covering Greece’s north, constitutes part of a wider strategic objective for further growth as one of Europe’s biggest gas and electricity retailers, highly ranked company officials have noted.

The Zenith investment, exceeding targets, highlights the Greek market’s prospects, both in gas and electricity, Eni officials pointed out.

EGL, an Eni corporate group subsidiary active in retail electricity and natural gas, is supported by a 1,600-strong workforce and caters to over 9 million customers in Italy, Greece, France and Slovenia.

Eni gas e luce nowadays stands as Italy’s biggest retail supplier of natural gas and second-biggest supplier of electricity.

The company, placing particular emphasis on customer experience, quality of services and a richer experience of additional services, is introducing to the Greek market trends and innovations already implemented in more mature European energy markets.

Zenith will continue placing greater emphasis on strategic growth through investments aiming to widen the customer base rather than takeovers, company sources, both at the parent company and its Greek subsidiary, have underlined.

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.

 

ENI’s FSRU proposal latest Crete energy sufficiency idea

Italian energy giant ENI has come up with the latest proposal for a role in resolving Crete’s energy shortage threat, ascertaining it is ready to provide an FSRU unit for LNG storage and gasification that could be moored off the island.

High-polluting diesel generators operating on Crete, Greece’s biggest island, must cease operating by the end of this year, according to European Commission requirements.

The ENI proposal could cover the energy supply needs of power utility PPC diesel-fueled generators planned for conversion to natural gas, as well as a 100-MW gas-fired facility.

Prior to this interest from ENI, energy firms forwarded a series of proposals, all different, to counter the Cretan matter.

GEK Terna was the first to emerge with a recommendation entailing the transfer to Crete of Heron I, a power plant in the Viotia prefecture, northwest of Athens, offering a 150-MW capacity. Qatar’s Powerglobe followed with its Power4Crete proposal, an FSRU for electricity generation. Greek power utility PPC proposed an upgrade of its facilities on the island.

Also, Greek gas grid operator DESFA has included the establishment of a gas terminal at Atherinolakkos, southeastern Crete, into its development program.

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.

 

 

Total seeking buyer for its 50% stake in Block 2, west of Corfu

French oil and gas multinational Total appears to be preparing to sell its 50 percent stake in an offshore license west of Corfu, Block 2, preferring instead to focus on other hydrocarbon interests in Greece, west and southwest of Crete.

Total, the operator of Corfu’s Block 2 license, established a consortium for this venture with Edison and Hellenic Petroleum (ELPE), each holding 25 percent stakes.

This license was signed in October, 2017 following the launch of a tender in 2014 that offered a total of 20 offshore blocks in the Ionian Sea and south of Crete.

Total is in partnership with US major ExxonMobil and ELPE for its licenses west and southwest of Crete.

Recent activity in Cyprus’ Exclusive Economic Zone (EEZ) – an area in which Total has joined forces with Italy’s Eni to take on Block 7 – as well as developments in the wider eastern Mediterranean, has turned the French oil and gas giant’s attention to this region, sources told energypress.

Further changes are expected in the Greek market. ELPE is believed to be seeking partners for exploration and production licenses it has acquired alone.

 

EDEY to drum up Greek oil, gas hopes at Italy, Romania events

Spurred by recent significant gas field discoveries at Cypriot and Egyptian offshore blocks and the favorable prospects these have generated for the wider region, top officials at EDEY, the Greek Hydrocarbon Management Company, will be looking to attract major foreign investors to new Greek blocks at two industry events in Italy and Romania.

EDEY chairman Yiannis Basias, who is in Ravenna, Italy today to attend the Offshore Mediterranean Conference & Exhibition, a leading industry event, will be exploring the potential interest of oil majors, including Italy’s ENI, for new offshore blocks in the Ionian Sea and off Crete to soon be licensed out.

EDEY chief’s deputy Spyros Bellas will follow up this effort in Bucharest at the Balkans & Black Sea Cooperation Forum, scheduled to take place April 4 and 5.

Tristan Aspray, ExxonMobil’s Vice President of Exploration for Europe, Russia, and the Caspian, hailed the wider region’s prospects at the recent Delphi Economic Forum in Greece. ExxonMobil is currently involved in exploration work being carried out in Romania.

Speaking earlier this month at London’s Global APPEX (Prospect & Property Expo), an event organized by the American Association of Petroleum Geologists (AAPG), Bellas, EDEY’s deputy, presented a road map of Greece’s hydrocarbon plans for 2019 to officials of foreign companies as well as latest and more detailed geological data on the Ionian Sea and Cretan regions. This data was processed by Norway’s PGS.

The strategy adopted at EDEY is to plan tenders for offshore blocks based on the interest expressed by foreign investors at this series of meetings.

Besides ENI and ExxonMobil, EDEY is seeking to convince Repsol, Shell and other US majors of Greece’s hydrocarbon prospects.

 

 

Tougher inspection may delay DEPA-Shell deal, privatization

A recent takeover agreement between Greek gas utility DEPA and Shell concerning the former’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 could be delayed, if not forced to change, by local Competition Committee concerns over the deal’s impact on market competition. Subsequently, a privatization plan for DEPA could also be delayed.

The committee is considering launching a full-scale inspection on the resulting accumulation of power the agreement with Shell would offer DEPA, already holding a 51 percent majority in these Athens supply and distribution ventures prior to the deal.

According to sources, the gas utility is expecting a committee decision, on whether to conduct an in-depth investigation or clear the deal, on September 17. Should a full-scale inspection be launched, the committee will have 90 days to deliver a decision. If this period elapses, then the DEPA-Shell agreement will be automatically approved.

In July, DEPA announced it had agreed to acquire Shell’s 49 percent in the EPA Attiki gas supply and EDA Attiki gas distribution ventures for 150 million euros.

On another front, the Greek gas utility’s withdrawal from the Zenith gas supply company covering the country’s north, through the sale, for 57 million euros, of a 51 percent stake in this venture to Italy’s Eni, previously a minority partner with a 49 percent share, has been endorsed.

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.

 

DEPA, Shell agreement to be finalized next week

An agreement reached between DEPA, public gas corporation, and Shell, for 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, is expected to be finalized next week.

The gas utility’s shareholders – TAIPED, the state privatization fund, controlling 65 percent of DEPA, and ELPE (Hellenic Petroleum), holding the other 35 percent – are expected to approve the agreement at a shareholders’ meeting on Tuesday, energypress sources have informed, which will clear the way for DEPA and Shell to sign their local takeover agreement. Less than a fortnight ago, the DEPA board approved the DEPA-Shell agreement.

Once the two sides have signed, the agreement will be forwarded to the competition committee for approval, not expected any sooner than August.

As has been previously reported by energypress, DEPA’s takeover agreement with Shell was reached for 150 million euros – approximately 39 million euros for the EPA gas supply company and 111 million euros for the EDA distribution company. The total amount is within the value range estimated by the gas utility’s consultants – close to the lower end.

In another agreement, DEPA stands to collect 52 million euros for the sale of its 51 percent stake in the Zenith gas supply company in the north to Italy’s Eni, plus five million euros for dividends. This amount is also within the gas utility’s evaluation range – towards the higher end.

The finalization of all three agreements represents the completion of the first stage of DEPA’s transformation. The next step will entail splitting the gas company into two firms, DEPA Infrastructure and DEPA Trade, before selling 51 percent of the trading firm.

“The next stage, once again protecting the interests of the company, shareholders, workers, as well as DEPA’s historic role in the transmission of natural gas in Greece, begins now,” an official with a key role in the developments told energypress.

DEPA board unanimously OKs Shell local takeover agreement

The board at DEPA, the public gas corporation, yesterday unanimously approved an agreement reached with Shell just days ago following prolonged negotiations for the 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.

This development had been preceded by DEPA’s finalized agreement with Italy’s Eni for the latter’s full acquisition of the EPA Thessaloniki-Thessaly gas supply company, commercially dubbed Zenith. This agreement is now being examined by the competition committee. A final decision is expected by the end of this month.

Returning to DEPA’s agreement with Shell, the gas utility’s shareholders – TAIPED, the state privatization fund, controls 65 percent and ELPE, Hellenic Petroleum, the other 35 percent – are expected to decide within the next fortnight before this agreement is forwarded to the competition committee for approval. A finalized decision by the committee is anticipated by August.

The agreement between DEPA and Shell was reached for 150 million euros – approximately 40 million euros for the EPA gas supply company and 110 million euros for the EDA distribution company. The total amount is within DEPA’s evaluation range – close to the lower end.

DEPA stands to collect 52 million euros for the sale of its 51 percent in the Zenith gas supply company in the north to Eni, plus five million euros for dividends. This amount is also within the gas utility’s evaluation range, towards the higher end, according to data provided by the utility’s financial advisers.

DEPA’s three agreements, heralded as a major achievement by the government, given the bailout’s prior action restrictions and deadlines, represent the completion of the first stage of the gas utility’s transformation following its withdrawal from the retail gas market in Greece’s north and bolstered position in the wider Athens market.  These agreements now clear the way for the commencement of DEPA’s privatization.

The gas utility realized, from early on, that it would need to reinforce its standing in infrastructure and realign itself in the retail gas market to remain competitive amid the newly liberalized, competitive market, pundits told energypress.

DEPA also needed to find solutions to meet bailout obligations, their objective more or less being to break the gas utility’s local dominance, which is why the company worked closely with the energy ministry on many position papers, negotiations with the lenders and board decisions.

 

 

DEPA strikes takeover deal with Shell, guarantees included

DEPA, the public gas corporation, and Shell concluded long-running negotiations over the weekend for the former’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.

The two sides needed to stretch a June 6 deadline agreed to by the government and country’s lenders before striking a deal. It is expected to be approved by the DEPA board tomorrow while an extraordinary shareholders’ meeting is expected to immediately follow for final approval. TAIPED, the state privatization fund, now control’s DEPA’s 65 percent and ELPE (Hellenic Petroleum) holds the other 35 percent.

The agreement between DEPA and Shell was reached for 150 million euros, as had become widely known long before the weekend’s deal.

Following much resistance, the Dutch firm ended up providing long-term guarantees covering any pending tax issues that may arise in the future, including tax matters or accidents resulting from faulty infrastructure development. Also, Shell has committed to terms that would block any future market reentry attempt by the Dutch firm, including indirectly, as a member of an investment scheme, or via any special purpose vehicle (SPV).

Shell was represented in its EPA Attiki joint venture with DEPA, the majority partner with a 51 percent stake, through a special purpose vehicle (SPV).

Once finalized, the DEPA-Shell deal will need to be endorsed by the European Commission’s Directorate General for Competition. The same goes for DEPA’s agreement already reached with Italy’s ENI for the latter’s acquisition of the Greek gas utility’s 51 percent in the EPA Thessaloniki-Thessaly gas supply company. ENI initially went into this joint venture holding a 49 percent stake and now stands to gain full control of the gas supply firm for 57 million euros. However, DEPA will maintain its 51 percent stake in the EDA distribution company covering the Thessaloniki-Thessaly area.

The completion of all these matters will enable the DEPA privatization plan, to offer investors two separate subsidiraries representing the utility’s trading and infrastructure divisions, to go ahead. According to energy ministry sources, DEPA’s considerable cash deposits for 2017, totaling 250 million euros, will be divided between the two prospective subsidiaries.

The Greek State intends to sell a 50.1 percent stake of DEPA’s trading subsidiary, which is expected to draw major investor interest, and retain a 14.9 percent for veto rights concerning matters of strategic importance, especially international gas supply agreements. Two major Greek players, Mytilineos and ELPE, as well as European firms have already expressed interest.

As for DEPA’s infrastructure subsidiary, the Greek State will initially maintain its current stake of 65 percent and, depending on decisions to be taken at ELPE for its 35 percent stake in the gas utility, could sell a 14 percent stake to keep 51 percent.

Recent competition committee action taken by Motor Oil to protested  DEPA’s EPA Attiki takeover plan, promising to give the gas utility control of the wholesale and supply markets in the wider Athens area, could prove to be an obstacle.

Speaking on the sidelines of an Economist conference in Athens last week, energy ministry officials appeared unperturbed. They pointed out that DEPA’s presence is being reduced to one supply firm from two, while adding this development will be followed by the sale of a majority stake in DEPA’s prospective subsidiary representing the trading division.

 

 

 

 

DEPA sale to spill over into 2019, many steps still needed

Revisions presented to a parliamentary committee last week for a complete ownership split of DEPA, the public gas corporation, and DESFA, the natural gas grid operator, promise to settle a pending bailout-related issue concerning distribution network ownership but many steps still lie ahead before the DEPA privatization, another bailout demand, is completed.

Although the government has included this sale’s proceeds in the 2018 national budget, the privatization is not expected to be finalized until 2019. Pending issues include the need to split of the gas utility’s commercial and distribution network divisions into two companies.

The energy ministry and country’s lenders agreed on a DEPA privatization model during recent fourth-review bailout negotiations but its specifics still need to be determined. The precise DEPA stake to remain with the Greek State and the sale’s time frame both remain undetermined.

Government officials have already unofficially admitted that it will be extremely difficult to announce two DEPA tenders offering investors stakes in the company’s trading and distribution network divisions within 2018, let alone collect the sale’s budgeted amount within the current year.

Negotiations between DEPA and Italy’s Eni for the latter’s full acquisition of the EPA Thessaloniki-Thessaly gas supply company, commercially dubbed Zenith, have been completed. DEPA previously held a 51 percent stake in this venture and Eni the other 49 percent.

However, DEPA has yet to finalize an agreement with Shell concerning the utility’s acquisition of the Dutch firm’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution companies covering the wider Athens area. DEPA currently holds 51 percent shares in these ventures.

DEPA’s agreements with Eni and Shell both need to be completed to clear the way for the privatization. Furthermore, both agreements will require approval from related supervisory bodies, including the European Commission’s Directorate General for Competition. It is estimated the required approvals cannot be completed sooner than autumn.

The ongoing bailout-required sale of a 50.5 percent stake of ELPE (Hellenic Petroleum), which holds a 35 percent share of DEPA, is another crucial pending issue.

Also, related legislation will need to be ratified before DEPA’s tenders offering investors stakes in the prospective commercial and distribution network companies are announced.

Given all these pending steps, the DEPA tender for the commercial division could  be launched within 2018 but, realistically, the sale concerning the distribution network cannot be announced any sooner than early 2019.

 

 

 

 

Major traders, Socar tipped to submit first-round ELPE bids

Two of the world’s biggest commodity traders, Dutch firm Vitol and Switzerland’s Glencore, will probably feature among the participants to officially express interest in ELPE’s (Hellenic Petroleum) international tender offering a 50.1 percent stake of the enterprise, according to latest information provided by sources.

The deadline for non-binding offers expires today following an extension of a previous May 18 deadline.

Besides the aforementioned commodity traders, Azerbaijan’s state-run energy firm Socar, joined by a European firm, possibly Spanish, is also tipped to declare non-binding interest in the bailout-required ELPE sale, sources have informed. This would represent a surprise development.

Socar had taken part in a previous DESFA (natural gas grid operator) sale and was declared the winning bidder before its long-running acquisition attempt was blocked by European Commission competition concerns.

News on the possible participation of major European energy players is not good. European petroleum groups such as Italy’s Eni, Hungary’s MOL, France’s Total, and, possibly, Spain’s Repsol, have reached decisions to not submit initial expressions of interest for the ELPE sale, according to energy market pundits.

A clearer picture on the sale’s preliminary turnout is expected later in the day when TAIPED, the state privatization fund, is expected to announce the list of first-round bidders.

 

 

DEPA, Eni to sign deal today, Shell selling its stake for €150m

Months-long negotiations between DEPA, the public gas corporation, and Italy’s Eni for the latter’s full acquisition of the EPA Thessaloniki-Thessaly gas supply company, commercially dubbed Zenith, are expected to be completed today with the signing of a finalized agreement.

Until now, DEPA has held a 51 percent stake in this venture and Eni the other 49 percent. No changes are expected to be made to the EDA Thessaloniki-Thessaly gas distribution company. DEPA and Eni will retain their respective 51 and 49 percent stakes in this venture.

Not unintentionally, the timing of the deal’s anticipated completion coincides with a meeting in Athens today between energy minister Giorgos Stathakis and the country’s lender representatives. Greek officials are keen to send a signal to the troika that pending bailout issues at the energy ministry are being settled.

DEPA also appears to have been reached an agreement with Shell to acquire the latter’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution companies covering the wider Athens area. DEPA currently holds 51 percent shares in these ventures. The two sides held marathon talks yesterday. Pending issues appear to have been settled while, according to sources, the agreement is worth 150 million euros.

The government and lenders still need to agree on the resulting market structure following these rearrangements before a DEPA-Shell deal can be officially announced. DEPA would fully control EPA and EDA Attiki and hold a majority stake in EDA Thessaloniki-Thessaly.

The finalization of DEPA’s future roles in all the aforementioned ventures will enable officials to begin discussing and implementing the gas utility’s privatization model. This sale is planned to offer investors a 65 percent stake.

A meeting today to involve Stathakis, the energy minister, finance minister Euclid Tsakalotos and the lenders will indicate whether a Greek proposal for the DEPA privatization stands a chance of being accepted.

An alternative DEPA privatization plan prepared by the energy minister entails the establishment of a holding company to serve as an umbrella for three new subsidiaries respectively covering commercial, distribution and international projects divisions.

A number of local officials have questioned whether this plan can raise the privatization funds expected from DEPA as the proposal, restricting investors to a minority stake of DEPA’s networks, is seen as unattractive.

A second idea has also been tabled. It entails the establishment of two subsidiaries, one representing DEPA’s networks and the other the firm’s commercial division, without a holding company. Each subsidiary would be sold separately to represent a 65 percent privatization. This proposal recognizes that the gas networks and commerce are two different markets. Some investors may focus on the networks and others on the commercial side.

Apart from the privatization model that needs to be adopted for DEPA, ELPE (Hellenic Petroleum), which holds a 35 percent stake of this gas utility, also needs to make its position clear.

ELPE officials have told energypress that retaining a minority role in DEPA is pointless for the enterprise, while suggesting ELPE would withdraw from its DEPA interests if the price is right.

ELPE is interested in the natural gas market but only as a majority shareholder with managerial control, the officials explained.

 

 

 

Eni set to sign deal with DEPA for EPA Thessaloniki-Thessaly

DEPA, the public gas corporation, and Italy’s Eni have finalized an agreement for the latter’s full acquisition of the EPA Thessaloniki-Thessaly gas supply company, commercially dubbed Zenith, energypress sources have informed.

Until now, DEPA was the majority shareholder of this venture with a 51 percent stake and Eni held the other 49 percent.

The same sources noted that the DEPA board intends to endorse the agreement at a meeting tomorrow ahead of its signing next week – either Tuesday or Wednesday.

Next week’s anticipated signing ceremony will coincide with a visit to Athens by troika officials for negotiations with the Greek government on pending bailout issues, including energy sector matters.

No changes will be made to the EDA Thessaloniki-Thessaly gas distribution company. DEPA and Eni will retain their respective 51 and 49 percent stakes in this venture.

DEPA is also negotiating with Shell to acquire the latter’s 49 percent share in their EPA Attiki gas supply company covering the wider Athens area. DEPA currently holds a 51 percent stake in this enterprise.

According to sources, certain details remain unresolved but an EPA Attiki agreement is expected to be inked by the two sides just days after the EPA Thessaloniki-Thessaly deal has been signed.

The shareholders of all companies involved will need to approve these agreements. The competition committee must also endorse them.

The completion of the EPA Thessaloniki-Thessaly and EPA Attiki agreements, satisfying natural gas market supply and distribution demands set by the country’s lenders, will enable the bailout-required DEPA privatization to proceed.

Energy minister Giorgos Stathakis has already announced that he will present, next week, to the lender representatives, a DEPA holding company plan to serve as an umbrella for three new subsidiaries respectively covering commercial, distribution and international projects divisions. The plan entails listing the holding company on the bourse while the possible involvement of a strategic investor in the subsidiary covering commercial matters will be examined.

It remains to be been how the troika will react to the energy minister’s proposal.

 

 

 

 

Finalized DEPA privatization plan needed, time pressuring

With time pressure growing and one alternative plan after another being worked and reworked by Greek authorities for the bailout-required privatization at DEPA, the public gas corporation, officials at TAIPED, the state privatization fund, the gas utility and energy ministry are likely to meet during the week to forge a finalized plan.

Greece’s obligation to sell a 65 percent stake will remain the basis of the plan, but  alternatives of equivalent worth will be sought. At least two alternatives have so far being proposed. The energy ministry and DEPA appear to favor establishing a holding company to be comprised of three subsidiaries and be eligible for a listing on the bourse.

According to this plan, one of the three subsidiaries will control the DEPA networks and a strategic investor could cquire a minority stake. The second subsidiary would take on commercial affairs but a majority stake could be sold to investors. The third subsidiary would remain a part of the holding company and control major projects.

According to DEPA sources, this option is the most preferred.

DEPA still needs to finalize negotiations concerning changes at its supply and distribution ventures with local partners Shell and Eni before the privatization procedure can proceed.

DEPA is expected to withdraw from the EPA supply company covering Greece’s north and remain a part of the distribution company, EDA Thess. DEPA holds 51 percent stakes in these ventures and Italy’s Eni the other 49 percent.

DEPA is also expected to acquire Shell’s 49 percent in EPA Attiki and EDA Attiki, two ventures serving the wider Athens area. DEPA also holds respective 51 percent stakes in these.

An announcement by DEPA and Shell is expected imminently, sources have informed. A price tag of nearly 150 million euros is expected to be attached to Shell’s withdrawal. Other details remain undisclosed.

 

 

Repsol, Eni among investors interested in ELPE’s 50.1%

Repsol is seriously considering taking part in an international tender offering 50.1 percent of ELPE (Hellenic Petrolem), announced just days ago, energypress sources have informed.

The Spanish company, already active in Greece’s hydrocarbon exploration and production market, recently formed a partnership with ELPE to submit a joint bid for an offshore block in the Ionian Sea.

Repsol meets all the ELPE tender’s strict criteria – financial, technical and geopolitical – set by TAIPED, the state privatization fund, in association with the sellers, the Greek State and Paneuropean Oil, a member of the Latsis group.

The Spanish firm maintains a strong presence in the refining sector. Its investments in this domain have totalled some 4 billion euros over the past few years. Repsol operates six industrial refineries. In 2016, Repsol’s assets were worth a total of 39.2 billion euros while the enterprise posted a total turnover figure of 36.3 billion euros and an operating profit of over two billion euros.

In the exploration and production field, Repsol has certified deposits of 2.3 billion barrels and is producing 690,000 bpd. Its refining capacity exceeds one mllion bpd.

Another major European petroleum firm, Italy’s Eni, is also believed to be closely monitoring the ELPE tender.

According to the tender’s terms, investors must be able to prove they possess readily available investment amounts worth at least two billion euros.

TAIPED reserves the right to eliminate any interested investor if such a course of action is deemed necessary by the Greek State for protection of national interests, energy securtity and energy supply.

A May 18 deadline has been set for first-round offers. Interested parties have until May 9 to enquire about the international tender’s terms.

 

 

 

Holding company plan tabled for DEPA privatization

DEPA, the public gas corporation, and local partner Shell are aiming to finalize and announce an agreement by the end of the month, possibly within the current week, for the latter’s withdrawal from their EPA Attiki and EDA Attiki gas supply and distribution joint ventures serving the wider Athens area.

Though details have not been disclosed, the imminent agreement is said to be worth nearly 150 million euros. Shell currently holds 49 percent stakes in these partnerships.

DEPA has already reached an agreement for Greece’s north for a still unspecified retreat from EPA Thessaloniki-Thessaly. This venture’s Italian partner Eni, currently holding a 49 percent stake, is expected to increase its share.

Once both agreements have been finalized and announced, a bailout-required privatization plan for DEPA will proceed.

TAIPED, the state privatization fund, has agreed that the original DEPA plan, entailing the sale of a 65 percent stake, is not an ideal option, DEPA officals told energypress.

A preferable alternative, or establishment of a holding company comprised of three subsidaries that could be partially listed on the bourse, has been presented by DEPA to TAIPED. The position of the lenders is not known.

According to the proposal, one of the three subsidiaries would control the networks, the second would be responsible for commercial matters, and the third would remain under the holding company and control major energy projects.

Preliminary DEPA privatization procedures lacking urgency

Preliminary procedures needed for the privatization of DEPA, the Public Gas Corporation, are not making satisfactory progress, officials monitoring the procedure have observed.

A formula for a reduction of the gas utility’s retail gas market presence has been established, but beyond that, little progress has been achieved. Officials at the finance ministry and TAIPED, the state privatization fund, are still awaiting the next vital step leading to this plan’s actualization, dependent on DEPA and its two supply and distribution partners Shell and Eni.

For quite some time now, DEPA and Shell have agreed on a road map for the former’s acquisition of the latter’s 49 percent stake in EPA Attiki and EDA Attiki supply and distribution ventures covering the wider Athens area. DEPA currently holds a majority 51 percent stake. However, as the weeks go by, the two sides have yet to agree on a sale price for the stakes held by Shell in these ventures.

DEPA and Shell have agreed on an evaluation formula concerning this transaction, as well as a back-up plan should there be any disagreement on the price.

The two sides are expected to have agreed on a sale price by the end of March, according to the bailout schedule. The evaluation process leading to this price tag has yet to be launched in earnest.

Besides the Shell partnership, DEPA also needs to finalize a deal with Italy’s Eni, which holds a 49 percent in EPA Thessaloniki-Thessaly. DEPA intends to sell all or most of its 51 percent share in this venture to Eni. DEPA’s future in EDA Thessaloniki-Thessaly remains unclear.

Alternative plans supported by the energy ministry for DEPA’s privatization appear to have waned, meaning that an initial plan for a strategic investor to acquire the Greek State’s 65 percent stake in DEPA will be pursued.

The finance ministry’s position on the DEPA privatization, as well as that of ELPE (Hellenic Petroleum) is pivotal. Finance Minister Euclid Tsakalotos is well aware of how seriously the lenders view these privatizations for the bailout procedure, including prospective relief measures.

A lack of cohesion amid the government’s ranks on the privatizations has become apparent. Just days ago, when he emerged from a meeting with lenders on the privatizations, Tsakalotos, when enquired about the DEPA alternatives proposed by Stathakis, the energy minister, responded: “Ask him”.

Oil majors set for Crete block offers, milder Ionian interest

With just days remaining before deadlines for tenders offering exploration and exploitation rights at a total of three offshore blocks off Crete and in the Ionian Sea, five petroleum firms, including three international oil majors, took part in an exploration security-related meeting held by EDEY (Greek Hydrocarbon Management Company) yesterday, which suggests they will be submitting offers.

Exxon Mobil, Total and ELPE (Hellenic Petroleum), whose interest in the Greek market prompted EDEY to offer two offshore blocks off Crete, Repsol, following developments for Ionian Sea investments, and Energean Oil & Gas, whose interest in the Ionian Sea area led to the other EDEY tender, all participated in the hydrocarbon company’s meeting, ahead of the deadines for the three tenders, expiring this coming Monday.

The interest expressed by investors for the two Cretan offshore blocks appears to be greater.

Noble Energy and Israel’s Delek, which have visited a related virtual room set up for the tenders by EDEY for information, were not represented by any officials at yesterday’s meeting. It remains to be seen whether these absences mean that the two firms will not submit offers on Monday.

At this stage it appears that a three-member consortium made up of Exxon Mobil, Total and ELPE, as well as Italy’s Eni, already active in Cyrpus, will submit offers for the Cretan blocks. A third offer from Noble and Delek would come as a surprise.

Eni recently had to deal with Turkish intervention in Cypriot waters, which has delayed the firm’s drilling plans for that area.

As for the one Ionian Sea block being offered, Spain’s Repsol has displayed a consistent interest, despite negative reactions by local authorities and citizens against nearby exploration work, with Energean, in the Ioannina area, northwestern Greece.

In an Oil & Gas Journal article published last month, two EDEY officials informed that areas west and southwest of Crete have shown serious signs of deposits.

The northwest part of the Ionian Sea, the location of the third block being offered, has also shown hydrocarbon potential as it shares similar geological characteristics with the southeast Adriatic Sea, already producing.

 

 

 

 

DEPA, Shell agree on road map for EPA, EDA Attiki transfers

DEPA, the public gas corporation, and Shell have set out a road map for the former’s acquisition of the latter’s 49 percent stake in their joint venture EPA Attiki, the gas supplier covering the wider Athens area, as well as a formula resolving any financial differences between the two, should a disagreement emerge.

The two enterprises, which have commissioned the same evaluator, have agreed on an evaluation process, energypress sources have confirmed.

DEPA and Shell have spent months negotiating the Greek gas utility’s interest to bolster its retail presence in the wider Athens area through an acquisition of Shell’s 49 percent share of EPA Attiki, for supply, as well as a corresponding stake in EDA Attiki, for distribution.

The European Commission has accepted DEPA’s interest to maintain its retail market presence in the wider Athens area.

As for the retail gas market in Greece’s north, an agreement has been reached for DEPA’s retreat, through the gas utility’s full or partial sale of its 51 percent stake in EPA Thessaloniki-Thessaly to Italy’s Eni, currently holding a 49 percent share of this venture.

All the aforementioned matters need to be finalized by the end of March, but evalution details must be settled well in advance.

Energy Minister Giorgos Stathakis has noted that the bailout’s third review agreement offers leeway for alternatives.

In a recent interview, the minister informed that negotiations concerning the energy sector’s privatizations have not concluded. Each case is being treated separately, he noted, adding that proposals for alternatives forwarded by consultants are currently being examined.

Energy sector privatizations are pivotal to the agenda at TAIPED, the state privatization fund. Some of these energy sector sales represent a key part of this year’s privatizations target, aiming for revenues of two billion euros.

 

 

 

TAIPED pushing ahead with DEPA sale, much work needed

TAIPED, the state privatization fund, is keen to push ahead with the privatization of gas utility DEPA, but the sale’s timely launch, expected in March, according to the latest bailout terms, will not only depend on the fund’s intentions.

In essence, this privatization’s punctual progress is dependent on Shell and DEPA, currently engaged in advanced talks for the Dutch firm’s sale of its 49 percent stake in retail gas supplier EPA Attiki. DEPA holds a 51 percent stake in this venture and wants to increase its hold.

The DEPA privatization, to offer 65 percent stake of the gas utility, cannot proceed unless the Shell and DEPA dealings over EPA Attiki have been finalized. Also, the European Directorate for Competition will need to endorse any EPA Attiki changes.

A well informed source has informed that Shell and DEPA are close to agreeing on a price for EPA Attiki’s 49 percent. The price gap is believed to have narrowed significantly. For quite some time now, it has been rumoured that Shell has requested a sum of around 150 million euros.

Rothschild, acting as DEPA’s consultant, and Lazard, representing Shell, are expected to appoint a common evaluator for an official price estimate. The evaluation process is expected to take at least one month to complete. Then, the two sides will still need to agree on a price before competition authorities in Athens and Brussels decide whether DEPA’s continued presence in the retail gas market raises any obstacles.

Given all these requirements, the DEPA privatization’s launch date, scheduled for March, should prove to be an extremely difficult target date.

The Greek government is eagerly anticipating a finalized deal between Shell and DEPA as a reinforced retail and distribution role for DEPA through EPA Attiki would undoubtedly heighten the interest of investors once the gas utility’s privatization is launched.

The government and country’s lenders appear to have reached a compromise deal on DEPA’s reinforced role in EPA Attiki in exchange for DEPA’s sale of its 51 percent stake in EPA Thessaloniki-Thessaly to Eni.

If so, DEPA will remain a powerful enterprise commanding three major fronts. Besides gaining a retail and distribution monopoly in the wider Athens market, the utility will also stand as a key gas importer and control gas distribution in all parts of Greece not covered by the EPA firms, through DEDA.

If the European Directorate for Competition does not endorse DEPA’s anticipated new role, then TAIPED, the privatization fund, will need to reexamine the utility’s privatization or postpone it.

The lenders are pressuring by excluding the possibility of any futher extensions.

TAIPED announced a tender yesterday for a legal consultant to work on the DEPA privatization. Interested parties face a February 26 deadline.

It remains unclear whether ELPE (Hellenic Petroleum) will offer its 35 percent stake of DEPA along with the Greek State’s 65 percent. ELPE has repeatedly expressed an interest in the natural gas market.

 

 

Major battle seen for liberalized gas market in 2018

The natural gas retail market’s liberalization, a new reality in Greece that has arrived along with the New Year as a follow-up to the wholesale gas market’s opening, promises to lead to major changes.

Combined electricity-and-gas packages are already being offered by retailers in a local energy market whose natural gas sales have grown from 2.9 billion cubic metres in 2015 to 5 billion cubic meters in 2017.

The natural gas market is expected to gain further impetus as a result of the electricity market’s liberalization. Numerous gas market retailers, besides EPA Attiki, covering wider Athens, and Zenith, covering Thessaloniki and Thessaly, are examining the prospect of offering combined electricity-and-gas packages.

The main power utility PPC has hired a consultant to help prepare its entry into the natural gas market, while major independent electricity suppliers have already launched campaigns for gas supply. Also, DEPA, the public gas corporation, is considering entering the electricity market, either alone or along with a partner.

As of 2018, independent gas suppliers will seek to further bolster their presence in a market traditionally dominated by DEPA.

The degree of DEPA’s future retail presence in the EPA supply companies serving wider Athens, Thessaloniki and Thessaly, to be determined by ongoing negotiations between the shareholders involved in these ventures, remains to be seen.

The government appears to favor DEPA’s withdrawal from EPA Thessaly-Thessaloniki and continued presence in EPA Attiki. DEPA currently holds 51 percent stakes in these ventures. Shell holds a 49 percent stake in EPA Attiki and ENI a 49 percent stake in EPA Thessaly-Thessaloniki. Shell appears to want to withdraw.

EPA Attiki and Zenith, covering Thessaloniki and Thessaly, have both expressed an interest to broaden their geographic reach.

According to data released for 2015, the retail natural gas market in wider Athens, Thessaly and Thessaloniki exceeded 293 million euros. EPA Thessaly-Thessaloniki posted a pretax profit of 45 million euros and EPA Attiki a pretax profit of 30.1 million euros, according to this data.

As for Greece’s wholesale natural gas market, DEPA, until recently, has stood as the undisputed dominant player owing to its overwhelming control of imports. In 2016, DEPA’s natural gas imports reached 42.7 million MWh, from 44.5 million MWh in total, a 96 percent share.

However, this picture began changing in 2017, beginning with Prometheus Gas, a joint venture of the Copelouzos Group and Gazprom Export, whose imports for the year reached one billion cubic meters, or 20 percent of the 5 billion cubic meter total. These amounts were imported from the gas pipeline at Sidirokastro, via Bulgaria.

According to sources, Prometheus Gas has already signed contracts for a greater amount in 2018. Clients include PPC, which has placed orders for its natural gas-fueled power plants.

M&M, a joint venture involving Motor Oil Hellas and the Mytilineos Group, has also made imports.

In recent comments to Reuters, Evangelos Mytilineos, chief executive of the Mytilineos Group, noted that the corporate group ranks as the country’s biggest natural gas consumer with a level of 1.5 billion cubic meters, adding that M&M Gas could soon start trading annual amounts of natural gas measuring around one billion cubic meters.

Despite the emergence of new players in Greece’s wholesale gas market, DEPA managed to increase its volume-based sales increase of 9 percent for 2017’s nine-month period, while its operating profit (EBITDA) rose by 32 percent to 223 million euros.

 

Gas market’s future shape not finalized, despite third review agreement

The future look of Greece’s natural gas market, including the role to be played by DEPA, the public gas corporation, remains murky despite an energy-sector agreement just reached between government officials and the country’s lenders as part of the bailout’s third review.

The deal, announced last Friday, goes no further than to state that gas market details will be based on arrangements to be agreed upon between DEPA and its EPA supply company partners, Shell and ENI, holders of respective 49 percent stakes in the EPA Attiki and EPA Thessaly-Thessaloniki ventures.

The country’s lenders, especially the European Commission, have been pushing for dominant DEPA to loosen its control of both the wholesale and retail natural gas markets.

Though the details still remain unclear, certain facts do offer an outline as to how things will stand.

DEPA can be expected to withdraw from EPA Thessaly-Thessaloniki and retain interests in EPA Attiki, serving the wider Athens area. The lenders appear to have agreed to a Greek proposal calling for DEPA’s increased stake in EPA Attiki. Energy minister Giorgos Stathakis has already made clear DEPA stands to gain greater control of the EPA Attiki board.

It is also known that Shell is negotiating its way out of EPA Attiki.

In addition, an internationally recognized consultant will be hired to conduct an evaluation of the EPA ventures as a negotiating base for the expected changes. The consultant will also be tasked with evaluating the value of premature monopoly losses imposed on EPA Attiki and EPA Thessaly-Thessaloniki. These monopolies will cease to exist in the retail natural gas market as of January 1 as a result of market reforms being applied.

DEPA still needs to negotiate a price for its EPA Thessaly-Thessaloniki withdrawal and, once having done so, will need to use the amount to be received to compensate Shell for its expected departure from EPA Attiki. DEPA will also be expected to use part of its 320 million-euro amount in cash reserves.

DEPA, Shell and ENI have been engaged in negotiations since last summer. The hardline approach of DEPA’s recently ousted leadership had not helped the negotiators find common ground. In fact, gaps widened during the process.

According to sources, ENI has shown willingness to compromise but was not backed by Shell.

Despite the difficulties, agreements between all three companies appear to be on the final stretch.