Kavala UGS privatization delay, DEPA Commercial sale on hold

The final round of privatization fund TAIPED’s tender for a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north has, once again, been postponed for a latter date, according to the privatization fund’s updated asset development plan.

The deadline for this UGS privatization’s binding bids will be reset for the final quarter of the year, possibly in October or November, after being planned for May or June, sources informed.

A number of issues are delaying the privatization’s completion. RAE, the Regulatory Authority for Energy, still needs to issue a pricing framework that will determine pricing details concerning the use of the UGS, the privatization fund informed.

Also, the fund is awaiting an EU regulation concerning compulsory gas storage requirements for member states, so that it may be included in the UGS project’s cost-benefit analysis.

In addition, a dispute between gas grid operator DESFA and RAE over the South Kavala UGS project’s accompanying projects is another obstacle preventing the tender’s continuation.

Elsewhere, in another major energy-sector privatization, gas company DEPA Commercial’s privatization appears to have been put on hold, indefinitely, as TAIPED, the privatization fund, in its update, noted alternatives need to be considered as a result of international developments and legal issues, a reference to the gas company’s ongoing legal battle with fertilizer producer ELFE.

ELFE is seeking compensation from DEPA, claiming overpriced gas supply between 2010 and 2015, while DEPA has filed a legal case seeking overdue amounts from the fertilizer producer, based in Kavala, northern Greece.

DEPA Commercial’s privatization has remained stagnant at the binding-bids stage for over a year.

 

South Kavala UGS facing delay, war prompts need for cost-benefit update

The final round of privatization fund TAIPED’s tender for a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north appears set for a latter date as authorities believe the project’s cost-benefit analysis needs to be updated as a result of Russia’s war on Ukraine.

TAIPED was aiming to stage the tender’s second round late in May, but officials at the energy ministry and RAE, the Regulatory Authority for Energy, believe the UGS project’s cost-benefit analysis now needs to be updated.

More specifically, at current gas price levels, it would cost 500 million euros to fill the UGS with gas, once its conversion from a depleted gas field has been completed. The conversion’s cost is also estimated at 500 million euros, meaning a total sum of one billion euros would currently be required to develop and fill the facility.

The project’s existing cost-benefit analysis, based on data prior to the war, is now out for consultation. It has already received two extensions.

It remains unknown if a recent European Commission decision requiring EU member states to maintain gas reserves representing 15 percent of annual consumption will be restricted to the war’s duration or become a permanent obligation.

Also, the project’s reexamination will most probably also need to take into account related domestic developments such as a plan for a gas network capacity increase.

 

South Kavala UGS tender’s final round not until early summer

The final round of privatization fund TAIPED’s tender for a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north will not be held until early this summer following a latest deadline extension by RAE, the Regulatory Authority for Energy, on consultation regarding the facility’s business pricing framework, sources closely following the project’s developments have informed energypress.

Prior to this deadline extension, the overall procedure was delayed by several months as a result of a disagreement between RAE and gas grid operator DESFA over supplementary investments that would enable the country’s grid to cater to the needs of the UGS.

Consultation for UGS pricing framework proposals and other details, including DESFA’s ten-year development plan, was to expire on March 14, but RAE has offered participants an extension until March 30.

It is believed RAE’s text forwarded for consultation has been deemed far from satisfactory by prospective investors. If no changes are made, the tender could fail to produce a result, despite its long duration.

Such a prospect threatens to leave Greece as Europe’s only country without a single UGS for many years to come.

Elsewhere, EU member states are rushing to fill their UGS facilities ahead of next winter, following an order issued by the European Commission as part of a plan to drastically reduce Europe’s reliance on Russian gas.

The EU has a total of 170 UGS facilities, offering a total capacity of 4.2 trillion cubic metres. Germany tops the list with 60 facilities that represent 42 percent of the continent’s UGS capacity. France follows with 16 UGS facilities, Italy has 13 functional facilities and 7 under construction, while Romania has 8 UGS facilities and Bulgaria one.

 

 

RAE to propose 50% consumer coverage of Kavala UGS cost

RAE, the Regulatory Authority for Energy, will propose that consumer surcharges cover 50 percent of the total development cost of a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, sources have informed.

The authority is expected to include the UGS project on the agenda of its board meeting tomorrow and may forward, for consultation, its pricing policy and project funding proposal on Friday.

According to the same sources, the RAE plan includes a 35 percent cost-coverage proposal for the UGS project through EU funds or other support mechanisms – the Kavala project is on the EU’s PCI list, enabling EU funding – and 15 percent coverage by the investor.

The energy ministry appears to agree with RAE’s proposal for consumers to cover 50 percent of the UGS project’s cost through surcharges.

The need for strategic gas reserves has been further highlighted by the current energy crisis.

A pending regulatory framework from RAE is expected to soon be finalized, which would enable privatization fund TAIPED to move ahead with its next steps in the UGS’s tender. The procedure has remained stagnant for months.

The tender’s two final-round qualifiers, GEK TERNA – DESFA (Greek gas grid operator) and Energean, still need to submit binding offers. Should no other obstacles arise, the two qualifiers are likely to have submitted their binding offers within the next three months.

Kavala UGS ‘pointless without €420m network investments’

Maria Rita Galli, CEO DESFA

Interview to Thodoris Panagoulis, Energypress.gr

  1. Ms. Galli, I sought this interview in light of the public statements that were made last week on the issue of the conditions for the creation of an underground gas storage facility in South Kavala. But before I ask you about this, tell me how the gas system responded to the recent big test due to the bad weather system “Elpis”.

Last week, the extremely unfavorable weather conditions caused a peak in gas demand, putting the gas network in extremely demanding operating conditions, very close to the system’s maximum capacity. From Monday 24th to Wednesday 26th, the daily gas demand reached a peak of 317 GWh, with historic record high hourly gas consumption of 17 GWh reached on Wednesday evening (26/1, 19.00-20.00). The gas demand was served by LNG from the Revithoussa Terminal and by pipeline gas from the northern entry points (Sidirokastro and TAP at N. Messimvria), with no flows from the Kipi entry point. In January, the LNG terminal received a record number of 8 cargoes unloading, of which one on last Monday in the middle of the snow storm. In these circumstances, DESFA’s personnel made a continuous and huge effort and, even throughout the snowstorm and abnormal cold spell, the successful uninterrupted operation of the System was ensured in its totality. And this, thanks to the reliability of our systems and the quality and dedication of our people.

  1. Let us now come to the controversial issue: The president of RAE stated, very harshly, that DESFA as TSO, presented to the Regulator a study with which he considers as necessary for the operation of UGS of N. Kavala, projects in the gas network of total worth of 1 billion Euros and that this cannot be done because the Greek consumer will be overburdened. Are these investments of accompanying projects of 1 billion euros really necessary to operate, when constructed, the UGS of Kavala?

Last week we read many declarations and comments – some of them quite inaccurate – close to a public debate, on the results of the study requested by the Regulator and performed by DESFA as TSO, on the investments needed in the natural gas network to ensure the operation of the planned South Kavala Underground Gas Storage. Even if this topic is very technical and based on complex analysis and simulations, carried out by DESFA and third-party experts and engineers, Ι will try to explain it as simply as possible and provide some factual information.

In September 2020, DESFA was requested by RAE, to elaborate a study – submitted in November 2020, more than one year ago – identifying the investments that would be necessary to accommodate all the requests for capacity access from the ongoing and planned projects, in accordance with state of the art technical and commercial solutions and applicable legal and regulatory framework. During our subsequent interactions with the Regulator, DESFA did not receive any negative comment or remark either on the constraints identified by the study or on the projects, which would be required for the removal of these constraints.

In March 2021, RAE requested DESFA, to carry out a Cost Benefit Analysis (CBA) for these investments, to assess which of them would be beneficial to be implemented as part of the NNGS development. Later, DESFA was requested to carry out an integrated CBA, which would include the Underground Gas Storage itself, as well as the investments in the NNGS which would be necessary exclusively for the operation of the UGS. Such network investments have been estimated in c.a. €420 million, an amount far below the alleged €1bn reported in the press. The CBA, conducted by a highly reputable independent international expert, was presented to the Ministry of Energy, RAE and HRADF in November 2021 and was submitted to RAE in January 2022, confirming that the benefits generated by the UGS, namely by the reduction of price volatility associated to seasonal demand and the security of supply – as quite evident from what has been happening in the EU market in the last months – largely exceeds the costs of the UGS project and the associated network enhancements.

  1. So you say that the required projects, based on the base-case scenario, are 420 million Euros. If these projects are not done, can the warehouse be operational? Does it make sense for an investor to enter the process if these projects are not done? It has also been expressed that no project is required…

To put it simply, the UGS in South Kavala, without these upgrades, cannot have access to the natural gas system, either as a whole or partially. Let me explain this further: currently the total maximum daily flow capacity of the Greek System amounts to c.a. 32 Mcm/day, with individual lower capacity caps on the East to West line from Kipi to Karperi and of the North to South line and vice versa. After the completion of the two compressor stations under construction (Kipoi & Ampelia), the total capacity of the system will reach 40 Mcm/d, with an increase primarily of the North – South capacity and vice versa. However, even after the addition of the new compressor stations, the capacity of the West-to-East branch of the system, which is constrained by the 24” diameter of the pipeline and is fully contracted to existing and ongoing entry and consumption points, will not allow to safely transport more gas in the specific branch. The UGS in South Kavala will be exactly on this branch.

The UGS – according to the information provided by HRADF – requires a system capacity upgrade in order for it to be able to serve all Entry and Exit points of the NGTS at an injection rate of gas into the storage of 7Mcm/d and a withdrawal rate of 9 Mcm/d, that is the amount of gas that in one day can be extracted from the storage to be used to serve the market. To comprehend the dimension, 9 Mcm/d equal approximately to the daily import of Russian natural gas from Bulgaria. It is important to understand that the access to the injection and withdrawal capacity of the storage needs to be guaranteed on a firm basis, otherwise its operation cannot be ensured, and no importer, trader or customer will have an interest to pay for such capacity and to store gas, without having the certainty of extracting such gas whenever needed and delivering it to the consumption points anywhere in the country. Assume you are a gas supplier, have booked and paid for the space in the storage, purchased the gas in summer, transported it and stored it in the storage, and when the winter cold spell comes and the prices are sky-rocketing, we tell you that you cannot take your gas and transport it when it is needed in the market…. In other words, without firm available capacity allocated to it, the UGS in South Kavala will have very limited value for the users and therefore the market as a whole. With no upgrade projects, there is no guaranteed access to the NNGS and vice versa.

  1. How are the projects that DESFA considers necessary for UGS related to the state of the rest of the gas transmission system, based on the role that natural gas now plays in the country’s energy balance, the quantities that are circulating and the new infrastructure that is being prepared?

The Greek natural gas market recorded a significant growth over the last seven years, with gas demand almost doubled from 2014 to 2021, reaching the historical high of 6.74 bcm in 2021, while further significant growth is expected, driven by new gas fired generation replacing lignite plants, new distribution areas and the role of Greece as an entry door of the wider Balkan and SEE Gas Market. Consequently, the peak daily gas flow is expected to reach c.a. 45Million cm/day in 2030, which exceeds the 40 Million cm/day of the NGTS, after the ongoing compressor stations enhancements.

To support such growth, many new import and export infrastructures have been planned to connect with the natural gas system, some completed, such as TAP, some under construction, as IGB and the Alexandroupolis FSRU, which took the FID few days ago, and the planned projects of the Dioriga Gas FSRU, the Greece-North Macedonia Interconnector, and the South Kavala Underground Gas Storage. These projects require the capacity of DESFA system to be enhanced to ensure that the associated gas imports can flow to the consumption points in the country and export points to neighboring nations. Enhancement projects are already ongoing as part of DESFA TYDP, which nevertheless are not sufficient to satisfy all the requests received. The existing and expansion capacity of the NGTS, resulting from the NGGS ongoing upgrade projects has already been fully contracted to the new import and export projects, as well as the new gas fired power plants under development. At the same time, two large scale projects that will drive Greece’s energy transition, the pipelines in West Macedonia and West Greece, are under way. The underground gas storage comes after these projects and requires new capacity, in order to operate properly, as described above.

  1. I would like you to comment on the fact that DESFA is on the one hand the Administrator of the national system (and also has the responsibility for its proper operation, security of supply, etc.), but also a shareholder of FSRU of Alexandroupolis, and a potential investor in YAFA Kavala. Are his proposals as an Operator influenced by his investment activities?

Not at all! As the Operator of the NNGS, we have very specific obligations for the integrity of the NNGS, but also the security of the supply of the country with natural gas. The performance of these obligations, under the control of RAE, derive from Greek and European legislation, but also directly affect the reputation of DESFA and its shareholders. The operational safety of the NNGS is our absolute goal, which, in all our years of operation, we have accomplished with adequacy and professionalism. In this capacity, we would never commit access to a new infrastructure for which we could not guarantee its safe operation in conjunction with the safe operation of the NNGS.

The assessment of which network enhancements would be needed to accommodate the operations of the storage came from the Regulator and have been delivered more than one year ago back in 2020. It is in the institutional role of the TSO to communicate to the market and the Regulator the necessary network developments, which are subject to public consultation. Eventually, one should be asking why this assessment was not requested before the launch of the South Kavala tender, but only after it was officially launched. We believe that any investors in the USG, and ultimately the Greek consumers, who are going to benefit or not from this investment, would require the assurance that the investments can operate before committing to it.

Therefore, indeed, also as potential bidder to the HRADF competition, we would like UGS in South Kavala to have unhindered access to the NNGS, in order to take the commitment to invest in the project.

I would like to emphasize that the role of DESFA. as the Operator of the National Natural Gas System is fully compatible with being a candidate investor in another natural gas infrastructure, which by the way will be fully regulated. This is a common feature of the European gas market, where the TSOs are also operators of the underground gas storages, as it is the case of our three TSO shareholders, Snam – which is the largest EU Gas storage operator, Enagas and Fluxys. Let us not forget that this is exactly what the Greek State demanded from the potential investors in DESFA privatization, that is to be operators of recognized prestige and experience, which could pass to DESFA their experience and know-how from more mature gas markets. What may be unprecedented in the Greek reality, i.e. an Operator being a potential investor in competitive tenders and private projects, is a regular case in the European energy scene. For example, all DESFA shareholders participate or are associated with companies involved in the management of underground storages and LNG infrastructure, in France, as well as in Germany, while in England and Portugal the respective Gas Transmission System Operators are also Operators of the respective electricity transmission systems.

Finally, our role as minority shareholder of the FSRU of Alexandroupolis, which we have concluded in December 2021, has no implications regarding our role as TSO, as well as potential participations in the USG Kavala. We have passed a very rigorous process of DG COMP, in order to enter the company and RAE has approved our entrance, recommending the unbundling between regulated and not regulated investments, which will be implemented in due time.

  1. Finally, I would like to ask you about the following: Do you have any comment on the “aggressive” tone during the recent public statement of the president of RAE. Prior to this placement, were you informed about RAE’s positions? Does the formal and institutional channel between the Regulator and the Administrator work?

It was something that no one from us expected and I cannot deny that we have been negatively surprised and disappointed, as our communication with RAE so far on this issue was absolutely smooth and cooperative, as well as with all the other issues in which we have a dialogue with RAE, which are currently quite a lot and very important for the energy market. It is noteworthy that inaccurate data were also given to the press, despite us having presented and explained the data in detail to RAE and had never received any indication that the Regulatory Authority had these kind of objections.

Let me say that it is not common practice, nor do we consider it correct, that the findings of a complex technical and economic study, are commented – with such negative statements – to the press before  any discussion with the Operator through the institutional channels of communication. In addition, some of the terms utilized wereparticularly offensive to DESFA, its employees and executives and we believe that it is not to anyone’s interest, and certainly not to DESFA’s, nor to the Regulator’s and the consumers’.

I would not wish to make an assessment of specific comments, but I would just like to highlight that a private company, such as DESFA, with its governance and shareholders with an international presence, will never engage in a useless large scale and long-term investment, no matter if regulated or not, as this would be finally detrimental to its economic interest and sustainable business model.

For our part, we remain, as always, open to engaging in a collaborative and constructive dialogue with market participants, institutions and the Regulatory Authority for Energy, and fully committed to continuing to perform successfully – with the highest know-how, skills and our commitment – the role of the gas transmission system operator for the benefit of consumers and the market.

Kavala UGS procedure delay, ministry guidance needed

RAE, the Regulatory Authority for Energy, has reached a preliminary decision on a business pricing framework for a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, but more work is needed before a public consultation procedure can be launched.

According to energypress sources, this procedure will go ahead once the authority and energy ministry have fine-tuned RAE’s terms.

RAE is expected to forward its preliminary decision to the ministry by Monday for a response ahead of the authority’s next board meeting on Thursday, when the UGS pricing framework proposal is expected to be finalized ahead of public consultation, which should begin at the end of next week.

Privatization fund TAIPED has pressed for this pending, and significant, step to be taken so that the prospective facility’s ongoing privatization can enter its final round of binding bids.

A gas grid operator DESFA and GEK TERNA partnership, as well as Energean Oil & Gas, have advanced to the second round of the project’s tender, staged by TAIPED, offering contracts for the development and operation of the facility.

The lead-up has sparked controversy. A DESFA proposal for a parallel double pipeline running from Thrace, in the country’s northeast, to northern city Thessaloniki, so that the Kavala UGS could function, would cost consumers in Greece nearly one billion euros, more than double the operator’s estimate of 450 million euros, RAE president Thanassis Dagoumas has contended.

DESFA, in response, insists the Kavala UGS pipeline proposal would cost 420 million euros and is necessary as existing infrastructure is close to saturation point, especially in the north.  Upgrades are needed to facilitate new infrastructure that would establish the country as a gas hub, DESFA officials noted, describing its proposal as a necessary network upgrade.

RAE, disgruntled, staging consultation for Kavala UGS price regulations

RAE, the Regulatory Authority for Energy, will discuss, at a board meeting on Thursday, business pricing regulations for a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, before offering a proposal for public consultation ahead of a finalized decision, the authority’s president Athanasios Dagoumas told a press conference yesterday, confirming a previous energypress report.

Privatization fund TAIPED has pressed for this pending, and significant, step to be taken so that the prospective facility’s ongoing privatization can enter its final round of binding bids.

A gas grid operator DESFA and GEK TERNA partnership, as well as Energean Oil & Gas, have advanced to the second round of the project’s tender, staged by TAIPED, offering contracts for the development and operation of the facility.

In his comments yesterday, the RAE chief, clearly annoyed, noted that the process, until now, has had to overcome obstacles. He was particularly critical of DESFA, alleging the operator forwarded an unacceptable proposal as the authority’s role is to “protect the people, not help operators maximize their profit.”

DESFA proposed the development of a parallel double pipeline running from Thrace, in the country’s northeast, to northern city Thessaloniki, so that the Kavala UGS could function, according to Dagoumas, who added this would cost consumers in Greece nearly one billion euros, more than double the operator’s estimate of 450 million euros.

“There’s no way this proposal would cost 450 million euros…must be joking. Consumers in Greece would need to cover one billion euros so that the operator can make a profit,” Dagoumas argued. “They ought to be ashamed of themselves, having consumers pay one billion euros for pipelines we don’t need. This is not a colony.”

Senfluga, the consortium representing Italy’s Snam (54%), Spain’s Enagas (18%), Belgium’s Fluxys (18%) and Coupelouzos Group’s DAMCO ENERGY SA (10%), controls DESFA with a 66 percent stake. The Greek State holds the other 34 percent.

DESFA, responding to energypress questions, offered a completely different picture, insisting its Kavala UGS pipeline proposal would cost 420 million euros and is necessary as existing infrastructure is close to saturation point, especially in the north. Upgrades are needed to facilitate new infrastructure that would establish the country as a gas hub, DESFA officials noted, describing its proposal as a necessary network upgrade.

 

 

RAE close to decision on Kavala UGS pricing regulations

RAE, the Regulatory Authority for Energy, is preparing to decide on business pricing regulations for a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, a step that would pave the way for the second round of binding offers in an ongoing privatization offering contracts for the development and operation of the facility.

The facility’s pricing regulations are scheduled to be discussed at a RAE board meeting this Thursday, sources informed.

The authority may opt to not take a final decision on the pricing regulations during this session and instead announce a preceding public consultation procedure of brief duration, between one and two weeks, to take into account the resulting feedback and then decide on the pricing regulation details, the sources added.

A gas grid operator DESFA and GEK TERNA partnership, as well as Energean Oil & Gas have advanced to the second round of the project’s tender staged by privatization fund TAIPED.

According to a previous RAE decision, 50 percent of the project’s cost will be passed on to gas network users. As for the other 50 percent, 35 percent is expected to be covered through EU funding, assuming the project is included on the EU’s Projects of Common Interest (PCI) list, while the remaining 15 percent will be taken on by the eventual investor.

Gas network upgrade cost in north crucial for UGS sustainability

The cost of reinforcing the gas network in northern Greece, a key component to the financial sustainability of a project entailing the development of an underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, has been discussed at an energy ministry meeting involving officials of RAE, the Regulatory Authority of Energy, gas grid operator DESFA and the privatization fund TAIPED.

Officials are seeking full clarity on the level of investments needed for the gas network in northern Greece so that natural gas can be transported to and from the prospective UGS.

According to DESFA, the country’s gas grid operator, northern Greece’s gas network now requires an upgrade as the prospect of a UGS facility was completely unanticipated when the region’s grid was initially designed and developed.

DESFA-GEK TERNA and Energean Oil & Gas have advanced to the second round of a project tender staged by TAIPED.

Network users to cover 50% of South Kavala UGS project cost

RAE, the Regulatory Authority for Energy, has approved guidelines specifying how the development cost will be shared for an underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, thereby settling one of the main regulatory issues that remained for an ongoing tender offering use, development and operation of the facility.

According to the RAE decision, 50 percent of the project’s cost will be passed on to gas network users. As for the other 50 percent, 35 percent is expected to be covered through EU funding, assuming the project is included on the EU’s Projects of Common Interest (PCI) list, while the remaining 15 percent will be taken on by the eventual investor.

In the event that the UGS is excluded from the EU’s PCI list, the Greek State will consider becoming a project partner so that the cost for gas network users is not increased.

DESFA-GEK TERNA and Energean Oil & Gas have advanced to the second round of a project tender staged by privatization fund TAIPED.

The almost depleted natural gas field, where the UGS will be developed, is located 18 km south of the main coastline of Kavala, roughly 6 km west of the island Thasos, at a sea depth of 52 meters.

Desfa-Gek Terna, Energean to S. Kavala UGS tender 2nd rnd

DESFA-GEK TERNA and Energean Oil & Gas have advanced to the second-round, binding-offers stage of a tender offering use, development and operation of an underground natural gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala”, while China’s CMEC-MAISON GROUP failed to qualify, privatization fund TAIPED has announced in a statement.

Following the signing of confidentiality agreements, the two qualifiers will be granted access to the tender’s virtual data room, where financial and technical data will be uploaded for due diligence procedures.

However, much work lies ahead before this project matures to enable the submission of binding offers. A number of regulatory issues remain pending, officials monitoring developments have informed, describing the project as complex and highly technical.

Pending issues include determining the percentage of the UGS’s capacity to be regulated for pre-determined earnings, and the percentage of capacity whose earnings will be shaped by market forces. The regulatory period and WACC level also need to be decided and set.

Given these tasks, as well as obstacles raised by the pandemic, binding offers are not expected to be submitted any sooner than late-2021. The final stage of this tender appears most likely to take place early in 2022.

Privatization fund names 2nd round qualifiers for tenders

HRADF pre-qualifies interested parties for the next phase of the tenders of Alexandroupolis and Kavala ports, the UGS “South Kavala” and the lease of smelting plant, mines and relevant mining rights owned by the Hellenic Republic

The Board of Directors of the Hellenic Republic Asset Development Fund (HRADF) convened today and pre-qualified the interested parties that meet the eligibility criteria to participate in Phase B (Binding Offers Phase) of the following tender processes:

  • Alexandroupolis Port Authority

The HRADF’s BoD decided that four interested parties meet the criteria to participate in Phase B for the acquisition of a majority stake of at least 67% of the “Alexandroupolis Port Authority” (in alphabetical order):

  1. Consortium composed of the companies CAMERON S.A.- GOLDAIR CARGO S.A.- BOLLORE AFRICA LOGISTICS
  2. Consortium INTERNATIONAL PORT INVESTMENTS ALEXANDROUPOLIS, composed of the companies BLACK SUMMIT FINANCIAL GROUP – EUROPORTS-EFA GROUP and GEK TERNA
  3. QUINTANA INFRASTRUCTURE &DEVELOPMENT
  4. THESSALONIKI PORT AUTHORITY S.A.

 “Philippos II” port, operated by Kavala Port Authority

For the tender of the sub-concession of the right to use, maintain, operate and exploit a multi-purpose terminal within “Philippos II” port (currently operated by Kavala Port Authority S.A. – O.L.K. S.A.), the Fund’s BoD pre-qualified the following Interested Parties (in alphabetical order):

  1. Consortium composed of the companies IMERYS GREECE S.A. – GOLDAIR CARGO S.A. – I.M.G. S.A.
  2. Consortium INTERNATIONAL PORT INVESTMENTS KAVALA, composed of the companies BLACK SUMMIT FINANCIAL GROUP – EFA GROUP and GEK TERNA
  3. QUINTANA INFRASTRUCTURE & DEVELOPMENT
  4. THESSALONIKI PORT AUTHORITY S.A. 
  • UGS “South Kavala”

The Fund’s BoD pre-qualified two interested parties to participate in Phase B (Binding Offers Phase) of the tender for the concession of the use, development and operation of an underground natural gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala”.

The pre-qualified interested parties are (in alphabetical order):

  1. DESFA-GEK TERNA
  2. ENERGEAN OIL & G.A.S. 
  • Smelting plant, mines and relevant mining rights owned by the Hellenic Republic

For the lease of the Larymna smelting plant, the Larymna and Loutsi mines and relevant mining rights and other assets owned by the Hellenic Republic and currently leased to “LARCO General Metallurgical & Mining Company S.A.” (LARCO), in Phase B of the tender will participate the following interested parties (in alphabetical order):

  1. COMMODITY & MINING INSIGHT IRELAND LIMITED
  2. GEK TERNA S.A. – AD HOLDINGS AG
  3. MYTILINEOS S.A.
  4. SOLWAY INVESTMENT GROUP LIMITED
  5. THARISA PLC
  6. TRAFIGURA GROUP Pte Ltd.

Following the signing of the relevant confidentiality agreement, the pre-qualified investment schemes for each tender will receive the documents of phase B’ (submission of Binding Offers) and will grant access to the virtual data room (VDR), where data and information related to the assets and the tenders will be uploaded.

Energy privatization plans delayed by negative conditions

The government has decided to slam the brakes on procedures for major energy-sector privatizations, preferring to defer bidding deadlines as a result of a series of administrative hurdles and external factors, exacerbated by challenges and uncertainties caused by the pandemic over the past year.

Binding-bid deadlines for the sales of two gas utility DEPA offshoots, DEPA Commercial and DEPA Infrastructure, initially planned for this month by privatization fund TAIPED, will now be reset for early autumn, sources have informed.

Lockdown measures have prevented possible buyers from visiting the DEPA Commercial and DEPA Infrastructure headquarters and facilities as part of their due diligence procedures.

In addition, an ongoing legal battle between DEPA Commercial and ELFE (Hellenic Fertilizers and Chemicals) has also unsettled potential buyers. According to sources, investors are demanding protection in the form of guarantees should any court verdict require DEPA Commercial to compensate ELFE over a gas-pricing dispute.

As for issues surrounding the DEPA Infrastructure sale, Italy’s Eni, currently holding a 49 percent stake in EDA THESS, a DEPA Infrastructure subsidiary distributing to the Thessaloniki and Thessaly areas, wants to sell its stake. Officials are now examining a solution that would enable the DEPA Infrastructure privatization to be completed and followed up by the sale of Eni’s 49 percent stake in EDA THESS.

TAIPED’s announcement of second-round qualifiers in a tender offering development and operation of an underground gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece is expected in April. But the overall procedure will not be completed until next year.

A privatization plan for ELPE (Hellenic Petroleum) has been put on hold given the unfavorable conditions surrounding the global oil industry at present.

South Kavala UGS qualifiers in March, plenty of work needed

Privatization fund TAIPED is expected to have completed its appraisal of first-round bids in a tender offering development and operation of an underground gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece next month, possibly within the first half of March, energypress sources have informed.

The fund, at that point, will be ready to announce its list of second-round qualifiers.

TAIPED and the government are taking cautious steps for this project, regarded as complex, especially on matters concerning the tender’s binding-offers stage, sources informed.

Three bidding teams have submitted non-binding expressions of interest for the first round. These are: China Machinery Engineering Co. Ltd. (CMEC) – Maison Group; DESFA – GEK Terna; and Energean Oil & Gas (in alphabetical order).

Much work appears to still lie ahead for this privatization, whose completion is not expected any sooner than next autumn, sources noted.

Pending matters include the delivery of a finalized operating framework for the South Kavala UGS by RAE, the Regulatory Authority for Energy.

This framework will determine the pricing system for the UGS, or the proportion of the facility’s earnings to be regulated and the proportion to be shaped through competitive procedures.

Besides RAE’s operating framework, bidders will also need to conduct due diligence before submitting second-round offers.

 

 

Brussels forwards new PCI list, to be finalized late this year

The European Commission’s fifth PCI (Projects of Common Interest) list in the electricity and natural gas sectors, being forwarded for public consultation, features, for now, a number of project additions and removals, compared to the previous edition.

Market officials and state authorities will have the opportunity to offer their views and observations over the consultation procedure’s twelve-week period before the European Commission adopts a finalized version of the fifth PCI list towards the end of 2021, based on an existing Trans-European Networks for Energy (TEN-E) framework, focused on linking the energy infrastructure of EU countries.

PCI projects are entitled to EU funding support. Brussels authorities introduced selection criteria revisions in December, ascertaining, however, that the impact of all projects, especially on CO2 emissions, will be appraised when finalizing the PCI list’s fifth edition.

The provisional list includes a number of electricity and gas sector projects concerning Greece.

Electricity-sector projects involving Greece include: a Bulgarian-Greek grid interconnection, expected to be completed in 2023; an Egyptian-Greek-Libyan grid interconnection headed by Green Power 2020 and scheduled for delivery in 2025; as well as three Egypt-Greece interconnections, two of these featuring Kykladika Meltemia SA as project promoter and expected to be respectively completed in 2025 and 2028, and a third headed by Elica SA and scheduled for completion in 2028.

An energy storage project planned by Eunice for Ptolemaida, northern Greece, and scheduled for completion in 2022 is a new entry on the PCI list.

In the natural gas sector, the PCI list includes: the Alexandroupoli FSRU (2022); a subsea pipeline between Greece and Italy, known as the Poseidon Pipeline (2025); EastMed, a pipeline planned to carry natural gas from the east Mediterranean to European markets, via Crete (2025); a compressor station in Thessaloniki’s Nea Mesimvria area (2022); a metering and regulating station in Megalopoli, Peloponnese (2025); a compressor station in Abelia, in Greece’s mid-north (2023); a compressor station in Kipoi, northeastern Greece (2024); a pipeline link for the Alexandroupoli FSRU (2022); a TAP pipeline capacity increase (2025); and the development of an underground gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece (2023).

DEPA calls for RAE to prioritize Kipoi, Abelia compressor stations

Gas utility DEPA has underlined the gas-supply security importance of two prospective compressor stations in Kipoi, northeastern Greece, and Abelia, in the mid-north, urging RAE, the Regulatory Authority for Energy, to prioritize their development.

The two projects, on a RAE list of infrastructure projects for preventive action, are expected to significantly improve energy supply security in Greece over the mid and long-term by facilitating the transportation process of natural gas.

DEPA stressed the importance of the two compressor stations in a letter forwarded to RAE’s public consultation procedure on its preventive action plan.

The two compressor stations are vital for grid-connection and gas-flow purposes concerning the prospective Alexandroupoli FSRU and an underground gas storage facility (UGS) planned for development at an almost depleted offshore natural gas field in South Kavala, DEPA pointed out in its letter.

Also, the Abelia compressor station is needed to ensure hydraulic gas-flow sufficiency from north to south, via the TAP project, DEPA noted.

Both compressor station projects feature in gas grid operator DESFA’s ten-year development plan covering 2021 to 2030.

South Kavala UGS tender qualifiers by early February

Greece’s privatization fund TAIPED will finalize its list of second-round qualifiers in a tender offering development and operation of an underground gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece by late January or early February, sources have informed.

Three parties submitted first-round expressions of interest: China Machinery Engineering Co. Ltd. (CMEC) – Maison Group; DESFA – GEK Terna; and Energean Oil & Gas (in alphabetical order).

Assessments of their supporting documents and other criteria are expected to be completed within the next twenty days.

RAE, the Regulatory Authority for Energy, still needs to deliver decisions concerning the operating framework of the UGS.

These pending issues include a RAE decision on the percentage of the UGS project’s capacity to be regulated, thus pre-determining this proportion’s revenue, and the earnings percentage to be determined by market forces.

The authority also needs to decide on the duration of the regulatory period and its WACC level.

New minister, just appointed, has issues to resolve in 2021

Kostas Skrekas, just appointed new energy minister as part of the government’s cabinet reshuffle, in place of Costis Hatzidakis, who has headed the ministry for a constructive year and a half, faces a series of pending energy-sector matters that remained unresolved in 2020. They need to be addressed as soon as possible. Developments and conditions this year will be pivotal for these matters.

Skrekas was previously deputy minister for agricultural development and food.

Also in 2021, a year during which takeovers and mergers are seen occurring in the retail electricity and gas markets, rivals will continue battling for market share gains. The target model’s launch two months ago has brought about new conditions, strengthening the positions of vertically integrated suppliers.

The need for a normalization of the target model’s new markets stands as the energy ministry’s most pressing task at present. A sharp rise in wholesale electricity prices as a result of soaring balancing market costs has deeply unsettled the market, impacting the standings of non-vertically integrated suppliers, as well as industrial enterprises and consumers, who face rising bills.

Market coupling with Bulgaria’s day-ahead market, scheduled to take place within the first three months of the new year, is the next step of the target model, a procedure designed to harmonize EU energy markets and promote competition.

New energy-intensive industrial tariffs also need to be set soon. Though essentially a matter concerning state-controlled power utility PPC and Greece’s industrial players, the cost of industrial energy is crucial for Greek industry, carrying particular political and economic weight.

Also, Greece has little time left in its negotiations with Brussels for a framework to offer third parties access to PPC’s lignite-based generation. This issue is no longer as crucial as it once was because the country’s lignite output has been drastically reduced. Even so, it remains important for independent suppliers.

A number of energy-sector privatizations could be completed this year. Gas utility DEPA’s two new entities, DEPA Infrastructure and DEPA Commercial, electricity distribution network operator DEDDIE/HEDNO, and a tender for a tender for the development of an underground natural gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece are all on this year’s privatization list.

In renewable energy, the ministry needs to take decisions within the first few months to clarify terms regulating the sector. RES investment interest is currently high. Steps still need to be taken in an ongoing effort to simplify RES licensing procedures, while a legal framework must be established for energy storage, offshore wind farms and hydrogen use.

 

Three bidders express first-round interest in South Kavala UGS tender

Τhree interested parties have submitted expressions of interest to a tender offering use, development and operation of an underground natural gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece, The Hellenic Republic Asset Development Fund (HRADF S.A.) has announced in a statement.

Expressions of Interest were submitted by the following parties, in alphabetical order:

  • CHINA MACHINERY ENGINEERING CO. LTD. (CMEC) – MAISON GROUP
  • DESFA – GEK TERNA
  • ENERGEAN OIL & GAS

HRADF’s advisors will evaluate the aforementioned expressions of interest and submit to the fund’s Board of Directors their recommendation regarding the candidates that qualify for the next phase of the tender (binding offers phase).

The almost depleted natural gas field “South Kavala” is located in the southwestern part of the Prinos-Kavala basin, in 52 meters of water depth in the North Aegean Sea, about 6 km off the west coast of Thassos.

The duration of the concession agreement will be up to 50 years following the licensing of the UGS in South Kavala. The conversion of the natural gas field “South Kavala” into a UGS will be carried out by the concessionaire within a binding period to be determined in the concession agreement.

The UGS South Kavala is intended to serve as energy infrastructure that will enhance the security of supply in the Greek market as well as in Southeastern Europe, ensuring gas supply to end users and facilitating security-of-supply obligations of power producers and natural gas suppliers.

Storengy’s Kavala UGS tender exit prompts formation changes

A decision by France’s Storengy (Engie) to not participate in a forthcoming tender offering an underground natural gas storage facility (UGS) license for the almost depleted South Kavala offshore natural gas field in the country’s north has prompted a domino effect of formation changes by groups of investors planning to bid.

GEK TERNA appears to have formed an association with gas grid operator DESFA for the tender after having previously agreed to join forces with Energean Oil & Gas and Storengy.

Energean Oil & Gas, holding a license for the virtually depleted South Kavala field, has not remained an onlooker. The company has also found a partner, believed to be domestic, from the construction sector, according to sources.

To date, Energean Oil & Gas has held talks with three major groups, Mytilineos, AVAX and Aktor, the same sources added.

A Chinese investor is also believed to be interested in the South Kavala UGS tender, staged by privatization fund TAIPED, but will not link up with any partners.

The tender is offering rights for the use, development and exploitation of the virtually depleted offshore natural gas field south of Kavala as a UGS facility for a period of up to 50 years.

Participants must submit first-round, non-binding offers by October 19 following three deadline extensions.

South Kavala UGS bidders talk formations as deadline nears

Prospective bidders of an upcoming tender to offer an underground natural gas storage facility (UGS) license for the almost depleted South Kavala offshore natural gas field in the country’s north are deliberating over possible partnerships as the October 19 deadline for official expressions of interest approaches.

Greek gas grid operator DESFA, Energean Oil & Gas and GEK TERNA will participate in the tender, according to enegypress sources, while some market officials believe a Chinese company, not yet revealed, is also interested.

All three Greek companies have remained tight-lipped on possible partnership formations for the tender. GEK TERNA and Energean Oil & Gas are believed to be discussing the prospect of teaming up, while DESFA and the Chinese company will most likely enter the tender alone, energypress sources informed.

The tender, staged by privatization fund TAIPED, will offer rights for the use, development and exploitation of the virtually depleted offshore natural gas field south of Kavala as a UGS facility for a period of up to 50 years.

Investments needed for the project’s development are estimated between 300 and 400 million euros.

The field is located approximately 6 kilometers from the west coast of the island Thasos, in the North Aegean Sea, at a depth of 52 meters.

Its development into a UGS facility promises to contribute to Greece’s energy security and that of southeast Europe.

Storengy exits UGS tender, partners seek new operator

France’s Storengy appears to have stepped back from an upcoming tender for the privatization of an underground natural gas storage facility (UGS) at an almost depleted South Kavala offshore natural gas field in the country’s north, energypress understands.

Storengy, a subsidiary of the Engie group, had formed a three-member consortium with Energean Oil & Gas, holder of the South Kavala field’s license, and construction firm GEK-Terna for this tender.

Storengy’s apparent decision to withdraw from the South Kavala tender may be linked to a decision reached two years earlier by Engie for a revision of its international interests and investment plans.

Energean Oil & Gas and GEK-Terna, Storengy’s two partners for the South Kavala tender, remain interested in expressing first-round interest by a September 30 deadline, but to do so, they must find a new partner, a certified gas grid operator, as required by the tender’s regulations.

The two players have subsequently moved closer to gas grid operator DESFA, already eyeing this tender. According to sources, talks between the two sides have commenced. DESFA will need to hold a stake of at least 20 percent in any partnership formed.

Both sides are also believed to be considering other partnership options. Storengy’s withdrawal could also bring in unanticipated European operators.

Investments of approximately 300 to 400 million euros will be needed to develop the South Kavala UGS.

Two, possibly three, bidders for South Kavala UGS license

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

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

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

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

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

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

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

Bulgaria gas pipeline explosion highlights need for local projects

Yesterday’s Bulgarian gas pipeline explosion in Bulgaria, prompting a supply cut into Greece from a northern route, yet again highlights how vital it is for Greece to develop two gas infrastructure project plans in Alexandroupoli, northeastern Greece, and Kavala, in the north.

The explosion of this pipeline, carrying Russian gas into Greece via Bulgaria, has not affected Greece’s energy security as supply from the alternate Kipoi route remains uninterrupted, while the contribution of high LNG reserves at the Revythoussa terminal, just off Athens, has also been crucially important.

However, a Greek energy crisis could have resulted if this accident were more serious, or if the Revythoussa facility did not exist, or, worse still, the accident coincided with even greater Greek-Turkish tensions than at present, which could have meant a cut in gas supply from Turkey, hosting one of Greece’s key gas import corridors.

The intensifying geopolitical instability of the wider region, which includes Turkey, an extremely troubling neighbor, makes imperative the existence of sufficient gas storage facilities to safeguard Greece’s energy security. Despite the precarious conditions in the region, Greece remains one of the European countries without sufficient energy storage infrastructure.

In addition to the existing Revythoussa LNG terminal, Greece’s infrastructure definitely needs to be reinforced by projects such as the Alexandroupoli FSRU and an underground gas storage facility at a virtually depleted offshore deposit south of Kavala.

 

US backs Greece’s east Mediterranean activities, major projects

All countries in the east Mediterranean region must carry out their activities in accordance with international law, including the International Law of the Sea as stipulated by the 1982 United Nations Convention on the Law of the Sea, the Greek and US governments have jointly announced following a high-level virtual conference held yesterday on energy issues.

This statement clearly offers US support for the positions of Greece, facing Turkish provocation.

The working group’s participating Greek and US officials reiterated the commitment of the two countries to cooperate on the effort to diversify energy sources in southeast Europe, collaborate with regional partners for energy source development, and promote regional energy security.

The latest energy working group builds on steadily growing bilateral cooperation following Greek-US strategic dialogue meetings in December, 2018 and October, 2019, the joint announcement added.

The Greek team was represented by the Ministry of Foreign Affairs’ Deputy Minister for Economic Diplomacy and Openness Kostas Frangogiannis and Deputy Environment and Energy Minister Gerassimos Thomas (photo). The US team was represented by Assistant Secretary of State for Energy Resources Francis Fannon and Under Secretary of Energy Mark Menezes.

Fannon, the Assistant Secretary of State, expressed satisfaction on the completion of the Greek segment of the TAP gas pipeline project, to carry Azeri gas to Europe.

The US official also offered support for the ongoing construction of the Greek-Bulgarian IGB gas pipeline interconnection and the progress achieved in plans for an FSRU in Alexandroupoli, northeastern Greece, a South Kavala underground gas storage facility, and Greek-North Macedonian connection.

Hydrogen factor needed for financing of South Kavala UGS

Development of an underground natural gas storage facility (UGS) in the almost depleted South Kavala offshore natural gas field will require a solution incorporating hydrogen into the investment, estimated between 300 and 400 million euros, which would categorize the project as eco-friendly and facilitate European Investment Bank financing.

As has been made clear by the energy ministry, Greek privatization fund TAIPED, currently conducting a cost-benefit analysis, will need to consider this prospect and plan for a storage facility holding hydrogen or a mix of this fuel with natural gas. Installation of carbon-capture and storage technology may also be helpful.

The EIB will stop financing conventional natural gas projects as of 2022. The bank may exempt from this rule projects limiting their emissions to 250 grams per KWh of energy produced.

This emission limit can only be achieved if natural gas is mixed with hydrogen, a prospect requiring higher-cost technologies but aligning the UGS with EU policies for full decarbonization in Europe by 2050.

The privatization fund has just launched an international tender for the South Kavala UGS in an effort to achieve EU funding for the project before a crucial EU funding deadline expires.

As a Project of Common Interest, this UGS is eligible for funding through the EU’s Connecting Europe Facility, vital for the investment’s sustainability. However, investors behind the project will need to submit their CEF application by the end of 2020.

The UGS South Kavala is intended to serve as energy infrastructure that will enhance supply security in the Greek market as well as  southeastern Europe.

 

Tender launched for South Kavala underground gas storage facility

The Hellenic Republic Asset Development Fund (HRADF), following the decision of its Board of Directors, has launched an international public tender process for the concession of the use, development and operation of an underground natural gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala”, it has announced in a statement.

The almost depleted natural gas field “South Kavala” is located in the southwestern part of the Prinos-Kavala basin, in 52 meters of water depth in the North Aegean Sea, about 6 km off the west coast of Thassos.

The duration of the concession agreement will be up to 50 years following the licensing of the UGS in South Kavala. The conversion of the natural gas field “South Kavala” into a UGS will be carried out by the concessionaire within a binding period to be determined in the concession agreement.

The UGS South Kavala is intended to serve as an energy infrastructure that will enhance the security of supply in the Greek market as well as in southeastern Europe ensuring gas supply to end users and facilitating the security-of-supply obligations of power producers and natural gas suppliers.

Tender process

The tender process for the award of a concession agreement for the use, development and operation of the UGS South Kavala will be held in two phases: a) submission of expressions of interest and pre-qualification of interested parties and b) submission of binding offers and selection of concessionaire.

The details of the tender process are described in the Invitation to submit an Expression of Interest which is available on HRADF’s website. Interested parties are invited to submit their expression of interest by no later than August 31st, 2020, 14:00 (GR time).

PriceWaterhouseCoopers Business Solutions S.A. (Financial), ROKAS Law Firm (Legal) and Seal Energy Pty Ltd (Technical) act as advisors to the Fund regarding the tender process.

Gov’t committed to Prinos oil field sustainability, deputy tells

The government is committed to supporting the sustainability of the offshore Prinos oil field in the country’s north, Greece’s only producing unit, heavily impacted by the coronavirus pandemic’s effects on the global economy, including record-low oil prices, deputy energy minister Gerasimos Thomas pledged last night in response to questions raised by MPs of the leftist Syriza party and KKE, the Greek Communist Party.

“We are committed to the oil field’s uninterrupted production, an effort through which jobs will be protected,” Thomas stated.

The government is currently negotiating with Energean Oil & Gas, license holder and operator of the offshore field, south of Kavala, for a solid solution, the deputy minister also informed.

A detailed announcement will be made once these talks have been completed and the government has shaped its proposals, the deputy minister told parliament after Syriza MP Soultana Eleftheriadou criticized him for being too vague with his remarks.

Thomas made note of the European Commission’s new framework for state aid as one of the solutions being worked on by the government. This framework provides flexibility, he pointed out.

The deputy minister also made reference to a government support plan for the Kavala region that includes the development of an underground gas storage facility at a virtually depleted offshore gas field south of Kavala, and an upgrade of the city’s port.

DEPA Trade, Infrastructure sales delayed for after summer

The final rounds of privatization procedures for DEPA Infrastructure and DEPA Trade, two new entities formed by gas utility DEPA to facilitate its sale, will be postponed until after summer as a result of the pandemic’s impact on global economic activity and investments, pressuring asset values, sources have informed.

Investors are being offered the Greek State’s 65 percent stake and Hellenic Petroleum ELPE’s 35 percent share of DEPA Infrastructure and DEPA Trade.

However, the privatization fund TAIPED, combining its efforts with the energy ministry and RAE, the Regulatory Authority for Energy, intends to press ahead with a June launch of a privatization procedure for a depleted offshore gas field south of Kavala planned to be developed as an underground gas storage facility.

An appraisal of first-round offers submitted by nine investment teams for DEPA Infrastructure and that many more for DEPA Trade is expected to be completed within June.

Barring unexpected developments, TAIPED should announce its list of finalists for both sales next month. This will be followed by the opening of a virtual data room facilitating due diligence procedures for both companies.