EPA Attiki

Swifter network growth at EDA Attiki, spurred by new culture

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Gas distributor EDA Attiki, covering the wider Athens area, has presented a greatly improved initial set of results concerning network growth and customer service efficiency, achieved following the company’s adoption of an upgraded corporate strategy.

EDA Attiki added more kilometers to its network during the first half of 2023 than it did throughout 2022, while the company has committed to consumer network connection waiting periods of no more than 30 days once related agreements have been signed, the gas distributor’s CEO, Leonidas Bakouras, told journalists yesterday.

The chief executive attributed the company’s improved performance to a new mentality adopted at EDA Attiki, the diligent efforts of its executives and employees, as well as the company’s utilization of multiple opportunities offered by the privatization of parent company DEPA Infrastructure, now under the wings of Italian energy giant Italgas, possessing vast experience and knowhow.

As part of its customer service upgrade, EDA Attiki has established an online service through which e-contracts concerning new network connections may be signed and supporting documents can be submitted. EDA Attiki is also adding 14 new customer service points to its overall offering.

EDA Attiki amassed an impressive total of 5,061 new connections in the first half of 2023, a complete turnaround from unfavorable data recorded during the energy crisis.

EDA Attiki had achieved a record number of new connection contracts in 2021, totaling 24,000, before an energy crisis-related slowdown midway through last year.

Highlighting the return of natural gas as a preferred energy source, seven of the company’s industrial customers who had turned to alternative sources at the beginning of the year, in an effort to offset elevated gas prices, have returned to natural gas over the past couple of months, Bakouras pointed out.

EDA Attiki aims to increase its total number of natural gas connections to 200,000 by the end of this year, from 186,515 at the end of 2022.

The company’s wider Athens network, based on data recorded at the end of 2022, covers 52 municipalities, measures 3,981 kilometers – both low and high-pressure systems – and represents a 28.5 percent share of the energy market.

EDA Attiki represents 440,000 households, 7,500 commercial consumers, and 230 large-scale industrial and commercial consumers.

DEPA Attiki’s development plan covering 2023 to 2029 aims to expand the company’s gas network to a total of 58 municipalities in the wider Athens area.

 

 

 

 

 

Gas trading debuts at energy exchange, prices at €85-88

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Wholesale gas trading debuted at the Greek energy exchange without any problems, transactions representing a total quantity of 1,101 MWh at prices ranging between 85 and 88 euros per MWh, energypress sources have informed.

Energy exchange officials and participating companies expressed satisfaction following the first day of trading.

Ten companies – electricity producers and natural gas suppliers – are so far registered to participate in trading on the new platform. These are: AXPO, ELPEDISON, MOTOR OIL, DEPA Commercial, DESFA, PPC, EPA ATTIKI, ZENITH, HERON and MYTILINEOS.

The new platform, operating between 9am and 2.30am, incorporates a day-ahead market covering three 24 periods in advance, as well as an intraday market. It also hosts gas balancing trading covering the grid’s needs.

Officials are planning to also launch, at a latter date, trading for futures contracts, which will enable companies to pursue hedging strategies without needing to resort to other European markets for such tools.

The new platform promises to lead to more competitive natural gas prices as it will enable companies to capitalize on opportunities whenever they arise.

 

 

DEPA Commercial, reshaping, seeks electricity supply license

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DEPA Commercial, one of gas utility DEPA’s new entities established as part of its privatization, has applied for a 500-MW electricity supply license, RAE, the Regulatory Authority for Energy, has announced.

This move by DEPA Commercial comes as part of the utility’s restructuring and transformation effort, sources said.

An electricity supply license promises to broaden DEPA Commercial’s portfolio, regardless of whether it will actually be used or not. In essence, the company, through this initiative, is making the most of tools available in the market, sources have concluded.

DEPA Commercial owns Fysiko Aerio – Hellenic Energy Company (EPA Attiki), a subsidiary already active in Greece’s electricity market. DEPA Commercial, however, could use its own electricity supply license for PPAs.

Gas supplier switching up 164% in newly liberalized gas market

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A total of 20,134 gas company customers, 4.18 percent of 481,838 in total, switched suppliers in 2019, data provided by RAE, the Regulatory Authority for Energy, has shown.

This mobility highlights the Greek retail gas market’s heightened level of competition less than three years since its liberalization and the determination of customers to secure the best possible deals.

In 2018, when the country’s retail gas market was liberalized, 7,611 customers of 441,330 in total, a far lower 1.72 percent, switched gas suppliers.

These figures represent a 164 percent rise, between 2018 and 2019, of customers switching gas suppliers.

Businesses registered the greatest level of mobility, followed by household customers and industrial customers, in that order, both in terms of gas amounts used and number of supply connections.

The supplier switching rate in the household category was 4.12 percent in 2019, up from 1.69 percent in 2018. In the business category, 5.72 percent of consumers switched suppliers in 2019, up from 2.41 percent in 2018.

On the contrary, supplier switching in the industrial customer category fell sharply to 3.17 percent in 2019 from 8.78 percent in 2018.

In numbers, 19,180 household consumers of 465,018 in total changed gas suppliers in 2019. In the business category, 944 of 16,505 made switches to new suppliers last year. As for the industrial category, 10 of 315 customers moved to new gas suppliers in 2019.

Despite the increased level of customer mobility, two suppliers, Zenith and Fysiko Aerio, remained dominant, capturing market shares of 65.51 and 25.76 percent, respectively, in terms of number of connections, according to the RAE data. The two frontrunners were followed by Mytilineos (2.85%), Elpedison (2.05%) and NRG (1.16%).

These market shares and rankings differ when based on gas volume. Under these terms, Zenith’s share was 35.95 percent in 2019, while Fysiko Aerio captured a 31.13 percent share. They were followed by PPC (5.96%), Mytilineos (5.44%), Heron (5.25%), Elpedison (5.21%) and DEPA (3.51%), among a field of smaller players.

 

 

Natural gas bill payments down 30% in last two months

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Natural gas bill payments have plunged by 30 percent over the past two-month period following a milder single-digit decline a month earlier, latest market data has shown.

Consumers have resorted to installment-based payback plans in far greater numbers during this two-month period of deterioration.

Suppliers, fearing a rise in unpaid receivables, are not hesitating to cut gas supply to customers who were already battling against energy debt prior to the pandemic and are now in deeper trouble. However, this supply-cut threat concerns a small percentage of customers.

Gas suppliers have yet to turn to the government for support measures, as was the case in the electricity sector. However, they may end up needing help in the form of low-interest loans, support mechanisms and other financial tools if the country’s tourism industry suffers a major setback this coming summer, as is feared.

Zenith and EPA Attiki (Fysiko Aerio) hold an 85.39 percent overall share of the country’s retail gas markets equipped with distribution networks – wider Athens area, Thessaloniki and Thessaly – data processed by energypress showed. Zenith leads with 46.14 percent and EPA Attiki follows with 39.25 percent.

EPA Thess, a former monopoly covering Thessaloniki and Thessaly, has lost approximately 15 percent of its market share to newly emerged rivals, the data showed. KEN, the biggest gainer, has captured 5.25 percent and is followed by Protergia (3.1%), Elpedison (1.91%), NRG (1.35%), Heron (1.05%), Watt+Volt (0.75%) and EFA (0.76%).

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

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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 privatization revisions headed for parliament in October

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The energy ministry is preparing revisions to the previous government’s privatization plan for gas utility DEPA by the end of this month and will submit a resulting legislative amendment to Greek Parliament in October, sources have informed.

The government intends to offer investors majority stakes in DEPA’s trading and infrastructure departments, a departure from the preceding Syriza administration’s plan to offer a majority stake in the gas utility’s commercial interests followed by a minority share in infrastructure.

Energy minister Costis Hatzidakis has not ruled out structural changes to the Syriza plan, which entailed a DEPA split into two new corporate entities, DEPA Trade and DEPA Infrastructure.

It remains unclear if gas supplier EPA Attiki, covering the wider Athens area, will be merged with DEPA Trade or sold as a separate asset.

Speaking at the ongoing Thessaloniki Trade Fair, Prime Minister Kyriakos Mitsotakis noted DEPA would be included in the government’s first round of privatizations.

The DEPA sale is expected to generate major investor interest.

Also speaking at the Thessaloniki event, Andreas Siamisiis, chief executive at Hellenic Petroleum ELPE, the holder of a 35 percent stake in DEPA, declared the petroleum company would seek to establish majority stakes in the gas utility. The Mytilineos and Copelouzos corporate groups have also expressed DEPA interest in public comments.

 

Ministry’s DEPA hiring plan raises privatization concerns

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An energy ministry plan to orchestrate hirings of 200 subcontracted external associates working for gas utility DEPA through a procedure that would skip bailout-related employment restrictions imposed on public sector enterprises has swiftly raised objections on a number of fronts and troubled authorities over the move’s impact on the utility’s prospective privatization.

Company shareholders fear the currently profitable utility’s market value will be diminished as a result of these hirings, seen as unnecessary additions that will bloat the payroll and reduce DEPA’s operating profit levels.

Besides the shareholders, DEPA employees on the payroll have also reacted fearing these hirings could affect their interests.

The ministry, looking to hand out favors as this is an election year, is planning to hire the 200 subcontracted workers through three subsidiaries not subject to the bailout-related employment restrictions imposed on public sector enterprises.

These are gas supplier EPA Attiki and gas distributor EDA Attiki, both covering the wider Athens area, as well as DEDA, responsible for gas network development in regions not covered by the parent company. Head officials at these subsidiaries have also expressed concerns over the repercussions of the energy ministry’s recruitment plan.

The DEPA privatization, not expected to be launched before July, may end up being loaded onto the agenda of the country’s next administration.

DEPA will be split into two new entities, DEPA Infrastructure and DEPA Trade, for the privatization, to begin with a tender offering a majority stake (50% plus one share) in DEPA Trade. A 14 percent stake of DEPA Infrastructure will also be placed for sale at a latter date.

DEPA Trade sale launch not expected until early summer

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A tender to offer investors a majority stake in DEPA Trade, a prospective company to emerge from a split of gas utility DEPA into two entities, will not be launched until early in the summer, either in June or July, sources have informed.

A draft bill prepared by the energy ministry for DEPA’s split into DEPA Trade and DEPA Infrastructure ahead of the utility’s privatization will offer a three-month period from the time of its ratification for the establishment of the two new units, sources informed.

The draft bill is scheduled to be submitted to parliament on February 28 and should be ratified by early March.

Once the new firms are established, investors will be offered a 50.1 percent of DEPA Trade, while, at a latter date, a 14 percent stake of DEPA Infrastructure will also be placed for sale.

The draft bill’s details also include directions for a merger of DEPA and its EPA Attiki gas supply subsidiary covering the wider Athens area for the establishment of DEPA Trade. This new company will take on all of the gas utility’s wholesale and retail gas activities, as well as its international gas supply agreements.

The DEPA board has also commissioned a consulting firm to prepare a five-year business plan, a necessary inclusion into a data room to be made available to prospective DEPA buyers, sources informed.

Ministry preparing 200 hirings at privatization-bound DEPA

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The energy ministry is maneuvering to clear bailout-related employment restrictions imposed on public sector enterprises and facilitate the recruitment at privatization-destined gas utility DEPA of the majority of 200 workers currently subcontracted as external associates.

The ministry’s leadership appears to have bowed to worker union pressure, ensuring the hirings will go ahead, sources informed. If so, they would bypass ASEP (Supreme Council for Civil Personnel Selection) restrictions.

As a result, 150 workers subcontracted by DEPA would be distributed to three gas utility subsidiaries: the wider Athens area gas supplier EPA Attiki; distributor EDA Attiki, also covering the wider Athens area; and DEDA, responsible for gas network development in regions not covered by the parent company. All three can hire personnel without conforming to ASEP restrictions. A further 23 workers are currently subcontracted with DEDA and between 30 and 35 with CNG refueling stations.

New employees are expected to be offered individual work agreements. The duration of these agreements remains unclear.

An energy ministry DEPA draft bill scheduled to be submitted to parliament on February 28 and designed to split the gas utility into two entities, DEPA Trade and DEPA Infrastructure, ahead of its privatization, is not expected to include extensive details on personnel matters, including the ministry’s recruitment plan.

In addition, pay cuts are also planned for DEPA’s current staff on the payroll.

 

 

Gas firm unions start strikes fearing privatization effects

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Workers at the country’s state-run gas companies, especially gas utility DEPA, are gearing up for widespread strike action as union representatives remain unconvinced various labor right demands will be settled following meetings with energy minister Giorgos Stathakis.

Union members want worker right assurances ahead of DEPA’s approaching privatization plan. These include a call for official hirings, on DEPA and gas grid operator DESFA company payrolls, of numerous staff members currently either maintaining sub-contracting associations with these gas companies or paid as freelancers through invoice booklets.

The unions also want authorities to drop a plan to offer investors a majority stake of DEPA’s commercial interests as part of the privatization.

According to the DEPA sale plan, the gas utility will be split into two companies, DEPA Trade and DEPA Infrastructure. Prospective buyers will be offered a majority stake in DEPA Trade, while, at a latter stage of the sale procedure, investors will be offered a minority stake of DEPA Infrastructure.

Panhellenic Energy Organization (POE) has called a 24-hour strike for today over the futures of DEPA’s external associates, numbering 150, whom they want added to company payrolls.

Union leaders also want salary protection measures for EPA and EDA supply and distribution subsidiary employees. Their remuneration arrangements are currently based on private-sector labor market rules. DEPA has agreed to acquire a 49 percent share of its EPA Attiki supply venture shared with Shell. According to sources, the rights of these employees will be protected for a period of at least one or two years following the company’s restructuring.

 

DEPA’s EPA Attiki takeover a competition woe, officials react

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Unfavorable results produced by gas utility DEPA’s most recent gas release auction, which sparked a surge in prices and severely limted amounts made available to independent suppliers, have sparked protests by market officials over a recent Greek competition committee decision approving DEPA’s acquisition of a 49 percent share held by Shell in their EPA Attiki supply venture, covering the wider Athens area.

The agreement gives DEPA, already holding a 51 percent stake, full control of the EPA Attiki supply firm and threatens to keep independent players out of the retail gas market.

The threat had been raised during Greek competition committee hearings ahead of the agreement’s local approval. Officials who opposed the DEPA-Shell agreement warned it would prompt market competition complications but were told EPA Attiki was headed for privatization as part of the DEPA sale.

However, the DEPA sale has been held back by a series of deferrals. It could take many more months to stage. During this time, retail gas market competition will remain subdued.

Despite the warnings and market issues now emerging, the Greek competition committee offered a swift and unconditional approval the DEPA-Shell agreement.

DEPA’s gas release auctions were introduced as a structural plan to promote market competition and reduce the gas utility’s market dominance.

The main power utility PPC secured the biggest amounts at DEPA’s most recent gas release auction. The gas amounts left for independent players were also severely restricted by substantial purchases from EPA Attiki, now fully controlled by DEPA.

Commenting on the resulting set up, one market official described the situation as DEPA selling gas quantities intended for independent players to itself.

Authorities are now expected to scrutinize the issue.

DEPA set for more ambitious Athens network growth plan

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The gas utility DEPA appears determined to adopt a more ambitious development and investment plan for its Athens networks now that the local Competition Committee has approved its agreement with Shell for an acquisition of the latter’s 49 percent share in their EPA Attiki supply and EDA Attiki distribution ventures, both covering the wider Athens region. DEPA already holds majority 51 percent stakes in both.

The leadership at DEPA considers the existing EDA Attiki development plan as being too weak, sources informed. The upgraded plan is expected to feature more ambitious projects in areas already covered as well as new projects in new territory.

The current five-year plan for EDA Attiki limits the distribution network’s development to 35.5 kilometers by 2022, an average of 7.1 kilometers per year. It primarily concerns network construction in areas where networks already exist, for increased density, and neglects expansions into new areas.

Taxation, personnel transfer details delaying DEPA split plan

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Taxation details concerning a gas utility DEPA split plan ahead of its privatization are believed to be keeping energy ministry officials from reaching a final decision on the split’s formation, or whether the development will entail a full or partial split of utility networks for transfers of resulting stakes into a new DEPA subsidiary.

DEPA wholly owns gas distributor EDA Attiki and DEDA and also maintains a 51 percent stake in EDA Thessaloniki.

The split has been incorporated into a double-fronted privatization procedure of state-controlled DEPA’s infrastructure and commercial interests. The government is pursuing a course to maintain the Greek State’s control of DEPA infrastructure.

The shareholder make-up of the new subsidiary will be pivotal to the decision. It has yet to be decided if DEPA or its current shareholders, ELPE-Hellenic Petroleum (35%) and the Greek State (65%), will own this new subsidiary. The energy ministry is currently calculating which option could be preferable in terms of taxation.

Payroll matters concerning personnel transfers are also holding up the energy ministry. Employees at the gas utility’s EPA and EDA Attiki supply and distribution ventures have been on payrolls regulated by private-sector rules as a result of Shell’s 49 percent stake. Shell has agreed to sell this stake to DEPA.

The Competition Committee has rescheduled a meeting on the matter for tomorrow, three days sooner than originally planned.

 

DEPA sale schedule now rests with Competition Committee

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

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

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

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

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

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

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

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

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

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

 

Copelouzos group emerges as latest DEPA Trade candidate

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

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

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

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

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

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

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

DEPA board unanimously OKs Shell local takeover agreement

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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

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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.

 

 

 

 

Ministry pushing for DEPA-Shell agreement, guarantees sought

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Long-running negotiations between DEPA, the public gas corporation, 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, now well past a June 6 deadline agreed to by the government and country’s lenders, failed to produce a finalized agreement at a meeting yesterday, which was intended to be the closing session, and will require an additional session today.

Greece’s energy ministry is applying heavy pressure on DEPA for a finalized agreement, believed to be worth 150 million euros. Price is not the issue. Instead, the delay has been attributed to guarantees demanded by DEPA to ensure the deal will not be breached at a future date.

DEPA wants Shell’s full market withdrawal through terms that would block any future market reentry attempt by the Dutch firm, including indirectly, as a member of an investment scheme.

For its EPA Attiki joint venture with DEPA, the majority partner with a 51 percent stake, Shell was not represented directly or through a subsidiary but a special purpose vehicle (SPV).

During yesterday’s meeting, DEPA officials made clear there will be no final agreement unless protective clauses demanded by the gas utility are included in the deal.

DEPA is also pushing for a term that would safeguard the Greek gas utility against any pending issues that may arise in the future, including tax matters or accidents resulting from faulty infrastructure development. Shell has yet to agree to such commitments.

In parliament, Democratic Alignment MP Giorgos Arvanitidis tabled a question demanding a full update from energy minister Giorgos Stathakis on the Shell-DEPA negotiations, including the progress of talks and the level of significance of an agreement for the ensuing privatization of DEPA.

The energy minister was also asked to confirm whether a 150 million-euro price for the agreement has been set and, if so, provide details on the criteria used given the fact that the negotiations are still in progress.

Arvanitidis also questioned if DEPA shareholders have offered their approval and sought confirmation of an alleged 4 million-euro fee for Rothschild, the gas utility’s consultant on matter.

Major battle in the making for upcoming DEPA privatization

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The upcoming privatization of DEPA, the public gas corporation, is expected to develop into a fierce contest between major Greek energy market players.

Yesterday, Evangelos Mytilineos, CEO of the Mytilineos corporate group, made no secret of his interest in DEPA’s commercial division to be offered to investors. This was preceded by ELPE’s (Hellenic Petroleum) interest for a presence in the natural gas market. Motor Oil Hellas has also noted it envisions a strong future in this specific market.

The main power utility PPC yesterday declared its intention to become active in the retail natural gas market, possibly within the current year. However, as a state-run firm, PPC will not be eligible to participate in the DEPA privatization.

The government and country’s lenders have agreed on a DEPA sale model entailing a split of the gas utility into two subsidiaries representing its commercial and distribution network divisions, respectively, for the privatization.

Motor Oil Hellas has filed a complaint to the competition committee over DEPA’s close-to-finalized effort to acquire Shell’s 49 percent of their EPA Attiki joint venture covering supply in the wider Athens area. DEPA already holds a 51 percent stake. This complaint could turn into legal action. Motor Oil Hellas is troubled by this sale plan as a private-sector investor is selling its stake to a state-run firm with a dominant market share.

Motor Oil Hellas is interested in the retail gas market section of EPA Attiki. The petroleum firm is less enthusiastic about EPA Attiki’s wholesale activity, including DEPA’s supply contracts with producers and importers.

On the contrary, the Mytilineos group is interested in the full range of DEPA’s commercial activity. The enterprise is already very active in the wholesale natural gas market as an LNG importer. Mytilineos has also established a direct trading partnership with Gazprom and is believed to be negotiating a deal with another major player.

ELPE, holding a 35 percent stake of DEPA, has also declared it envisions a gas market role, either through DEPA or independently. ELPE could bid for DEPA’s commercial subsidiary, as long as it is ensured a majority stake and managerial control of this enterprise.

A foreign energy firm already active in the Greek market as a member of a consortium is believed to be interested in DEPA’s distribution networks, according to energypress sources.

Despite the early interest shown by investors in the DEPA sale, indicating conditions are now appropriate, the specifics of DEPA’s privatization model have yet to be finalized. In his comments yesterday, the Mytilineos group’s CEO forecast that the DEPA sale will go ahead and be completed this time round following a stalled attempt back in 2013.

 

 

 

 

DEPA, Shell agreement still not reached as deadline expires

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Long-running negotiations between DEPA, the public gas corporation, 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, are still not over despite the energy ministry’s commitment to the country’s lenders for a settlement of the matter by June 6, today.

Price is not believed to be an issue in the delay. The two sides have agreed on a 150 million-euro price, according to sources, following evaluations carried out independently by DEPA and Shell.

Instead, the delay has been attributed to the great detail of attention shown by DEPA to guarantees that will ensure Shell’s full market withdrawal and also block any future market reentry attempt by the Dutch firm, including indirectly, as a member of an investment scheme.

Shell is not represented directly or through a subsidiary for its EPA Attiki joint venture with DEPA, but, instead, through an SPV (Special Purpose Vehicle). DEPA wants Shell, or one of its subsidiaries, to commit the Dutch company to a lawful execution and maintenance of the agreement to be signed.

In addition, DEPA is pushing for a term that would safeguard the Greek gas utility against any pending issues that may arise in the future, including tax matters and accidents as a result of faulty infrastructure development. Shell has yet to agree to such commitments.

An agreement between DEPA and Shell would clear the way for the Greek gas utility’s privatization, originally scheduled for 2018 but now not expected to be completed until some point in 2019.

 

DEPA, Shell talks for Dutch firm’s local market exit still not over

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Long-running negotiations between DEPA, the public gas corporation, 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, have yet to be finalized but could be successfully completed within the next few days, DEPA sources have informed.

DEPA holds a 51 percent stake in these ventures and is negotiating to buy out Shell for a reported sum of 150 million euros.

The two sides are believed to have agreed on most matters but are still working on fine details concerning Shell’s full market withdrawal. DEPA is pushing for an agreement that would rule out any possibility of Shell’s eventual reentry into this market.

Sources explained it would be pointless for DEPA to pay 150 million euros now only to see the Dutch firm reemerge at some point in the future as part of a rival team.

Tax and environmental issues, concerning the existing DEPA-Shell ventures, that could arise in the future are also being closely examined.

An agreement between the two sides is expected no later than June 6. DEPA’s bailout-required privatization plan, to offer investors a 65 percent stake, is expected to be shaped immediately following the utility’s agreement with Shell.

DEPA is expected to be split into two enterprises – one to handle the networks and the other commercial matters – to be sold separately, energy minister Giorgos Stathakis and the country’s lenders appear to have agreed. This model, still unclear, needs to be fine tuned.

The Greek State is expected to keep a majority stake in the firm controlling the networks and a minority stake for the commercial firm, according to Stathakis. He has not elaborated on specific stakes.

This plan was tabled by TAIPED, the state privatization fund, not the energy minister, who proposed a far more elaborate model entailing the establishment of a listed holding company comprised of three subsidiaries to respectively handle the networks, commercial matters and international projects, including gas pipeline projects such as the IGB and IGI Poseidon. Investors would have been offered a minority stake for the first and a majority stake for the second, while the third would have remained under the holding company’s control.

The country’s lenders expressed doubts over this proposal’s feasibility and opted for the two-firm solution.

 

 

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

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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

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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.

 

 

 

 

New retail gas market players restrained by various obstacles

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Rivals of EPA Attiki, the dominant natural gas supplier in the wider Athens area, have confronted various obstacles in their efforts to gain ground since the beginning of the year, when this market was liberalized.

Application processing delays and bureaucratic procedures faced by consumers when seeking to transfer from one supplier to another are among the obstacles subduing the efforts of new players.

Certain smaller suppliers have already lodged complaints to RAE, the Regulatory Authority for Energy, while others are preparing to do so.

Problems with a four-digit hotline for the sector have also been reported. In addition, the market operator has reportedly avoided accepting customer transfer applications, citing various reasons. Amid the subsequent delays, many customers have ended up staying with EPA Attiki.

Also, new tenants moving into properties have had difficulties registering with gas suppliers of their choice as previous property tenants have departed while owing gas bill amounts to EPA Attiki. Gas supply applications have been rejected in such cases despite the different tax file numbers of previous and new tenants.

The various problems will take time to resolve, while test runs should have been held in December, one market official stressed.

It should be pointed out that most gas suppliers are using the current year to test the waters for a measure of the market’s potential and have yet to make full-fledged efforts.

New players are expected to launch promotional campaigns in May and June. These efforts should peak around autumn, when the real battle for market shares in the liberalized retail natural gas market is expected to commence.

 

RAE approves gas supply license bid from PPC, seeking transformation

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RAE, the Regulatory Authority for Energy, has approved a gas supply license application submitted by the main power utility PPC, energypress sources have informed, a move that essentially represents a first step in the power utility’s transformation from an electricity firm to a full-ranged energy group.

It now remains to be seen how the utility will opt to move in the natural gas market.

According to the same sources, PPC is still organizing its natural gas market entry with assistance from two consulting firms, Boston Consulting and Samaras & Associates, both preparing the utility’s related business plan. A finalized plan concerning combined electricity-and-gas packaged to be offered by PPC is expected to be ready by the summer.

The power utility is believed to be aiming for a natural gas market share of around 30 percent, given its gigantic customer base in the electricity market. Experience has shown that major electricity firms entering natural gas markets in other parts of Europe have achieved such market penetration levels.

The Greek gas market offers enormous potential. The current total of natural gas consumers, numbering 600,000, is expected to grow at a rate of between 30,000 and 40,000 new customers per month over the next few years. Of course, PPC will face tough competition in two seasoned natural gas firms, EPA Attiki, supplying the wider Athens area, and Zenith, supplying Thessaloniki and Thessaly. These rivals also intend to push for greater market shares.

 

 

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

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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

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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.

 

 

DEPA, Shell seen picking common EPA Attiki evaluator

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DEPA, the Public Gas Corporation, and Shell, partners in the retail natural gas supplier EPA Attiki covering the wider Athens area, appear headed towards selecting a common evaluator for the appraisal of the Dutch firm’s 49 percent stake.

DEPA holds a majority 51 percent share of this venture and is seeking to increase its stake. Shell has made clear it wants to withdraw from Greece’s retail natural gas market.

Rothschild and Lazard, the financial consultants representing DEPA and Shell, respectively, are meeting daily for negotiations believed to be constructive, energypress sources informed. At this stage, it appears that the two sides are nearing an agreement. There has been no news of a sale price for Shell’s 49 percent, but developments on this front can be expected once an evaluator has been commissioned.

Shell wants the cost of the premature end to EPA Attiki’s market monopoly, a bailout requirement, factored into the agreement. The Dutch firm had entered EPA Attiki on terms guaranteeing the venture exclusive supply rights for the wider Athens region until 2030. Shell has set a price of 150 million euros for this premature monopoly loss but DEPA has questioned the figure.

A tight schedule needs to be maintained and final decisions must be taken by March. Any delay would impede the planned DEPA privatization, another bailout reqirement, to offer a 65 percent stake of the Greek gas utility. According to the revised bailout, this privatization has been timed to begin in late March, presumably seen as a time when DEPA and Shell will have reached a deal.

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.

DEPA’s future role in EPA Attiki, as well as EPA Thessaly-Thessaloniki, a venture in which the utility also holds a 51 percent stake, will need to be cleared up before the DEPA privatization procedure can begin.

The Greek government supports DEPA’s intention to remain in EPA Attiki and withdraw from EPA Thessaly-Thessaloniki. The country’s lenders want DEPA’s dominant market role diminished.