PPC expects major LNG tender turnout for 2.7 million MWh

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

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

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

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

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

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

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


Jetoil placed on the comeback trail by new owner Centracore

Bankruptcy-struck oil trading company Jetoil, now controlled by Austria’s Centracore and on the rebound, has reclaimed approximately 15 percent of the fuel-station network it controlled prior to the rescue plan.

Jetoil now operates 83 fuel stations (DODO, dealer-owned, dealer-operated), primarily in northern Greece, as well as the Thessaly, Epirus and other mainland regions.

At the peak of Jetoil’s crisis in the summer of 2016 – when founder Kyriakos Mamidakis committed suicide, aged 84, not long after the company had filed for bankruptcy – the company’s retail network had shrunk to just 34 outlets.

A Jetoil rescue plan was approved Iast year. Strategic investor Centracore agreed to take on the company’s liabilities following a partial haircut.

Besides a purchase price of 107 million euros, the new Jetoil shareholder has invested 10 million euros to upgrade the company’s storage facility in Kalohori, on the outskirts of Thessaloniki.

Jetoil has increased its sales in Greece and achieved significantly higher exports since its takeover. Total sales for the first financial year since Centracore’s entry reached 420 million euros generated by a trading volume of 350,000 metric tons.

In a year, the company has achieved 35 percent of its business plan’s target, set at one million metric tons of trading volume, or a 10 percent Greek market share, including exports.

The strategic investor, maintaining access to Russian refineries, has admitted the decision to invest in Greece was based on export potential to Balkan markets. Centracore obtained a Greek trading license in July, 2018.

Centracore is a Vienna-based trading company headed by Luxembourg’s UFG Europe Holding, holding an 80.1 percent share and comprised of private equity funds. Russian Petroleum company Rosneft holds the other 19.9 percent.

Cetracore, whose make-up includes Rosneft, prepares for Jetoil takeover

A request submitted today by Jetoil to have its bankruptcy protection case postponed for a latter date has been accepted by a Greek court, which reset the session for February 14.

The oil trading company, whose network of petrol stations in Greece shrunk from roughly 8,500 to 6,000 over the past few years, sought the court postponement to prepare and apply for a revised bankruptcy procedure, based on article 106B, the same legal provision resorted to by the fallen Marinopoulos supermarket chain.

This revised bankruptcy approach is linked to takeover interest expressed in Jetoil by Cetracore Energy, a Vienna-based oil trading company. Russia’s Rosneft holds a stake in the Austrian company.

According to sources, a company official made a court appearance today to confirm this interest. An agreement, including confidentiality terms, has been signed by the two sides.

Jetoil’s founder and president Kyriakos Mamidakis recently committed suicide at the age of 84, not long after the company filed for bankruptcy last June, a coroner’s report confirmed.

At its peak, Jetoil held a 10 percent market share following the addition of the Dracoil and El Petrol retail networks to its ranks.


Rosneft’s crude price offer to determine fate of ELPE deal

Last Friday’s signing of a Memorandum of Understanding (MOU) between Greek refinery ELPE (Hellenic Petroleum) and Rosneft, valid for one year with an option for renewal, could create significant prospects for ELPE if the Russian petroleum group offers crude at a fair price.

This detail was not specified in the MOU, signed during Russian president Vladimir Putin’s two-day visit to Greece last Friday and Saturday.

If offered a fair price for crude by Rosneft, ELPE can be expected to make substantial orders. The price issue will be discussed in June by a joint committee to be established by the two sides, when they meet to specify trading arrangements.

Rosneft ranks as one of the world’s biggest and most competitive petroleum groups. It operates based on an extraction cost of less than five dollars per barrel, compared to a level of about 15 dollars registered by many rivals. Rosneft is exploiting an enormous yet relatively shallow deposit in Siberia, which helps limit its extraction costs.

Although ELPE is a peripheral player among giants in the international market, the Greek refinery’s output of 350,000 barrels per day is respectable. Russian companies, like all major players, are seeking trading opportunities throughout the world, including with smaller partners such as ELPE, to compensate for lower oil prices.

The Greek refinery will be supplied crude by the Russian petroleum company to be refined and shipped back to the Russian firm as partial or full payment for the crude supplied. The very same ships delivering Russian crude to ELPE’s facilities will depart loaded with petroleum products refined by ELPE.

The deal is based on a new approach being pursued by ELPE that entails conducting business directly with suppliers, without trader intervention, in an effort to reduce costs.

ELPE managing director Grigoris Stergioulis had traveled to Moscow in April for meetings with highly ranked Rosneft officials, in search of closer trading relations.

No quantitative details seen for today’s ELPE-Rosneft deal

No quantitative details will be specified in a memorandum of cooperation for trading activity between Greek refinery ELPE (Hellenic Petroleum) and Russian petroleum group Rosneft, to be signed today as part of Russian president Vladimir Putin’s two-day official visit to Greece.

As was disclosed by energypress this week, ELPE, as part of its new framework of cooperation with Rosneft, will be supplied crude by the Russian petroleum company, which, in turn, will purchase ELPE petroleum products.

The deal is based on a new approach being pursued by the Greek refinery that entails conducting business directly with suppliers, without trader intervention, in an effort to reduce costs.

ELPE has acted likewise with petroleum firms in Iraq, Egypt, and Iraq’s Kurdish territory, which has led to a reduction of crude purchase costs by half a dollar per barrel. The cost-related benefits, of course, would diminish if oil prices rise.

Rosneft’s chief executive Igor Sechin, a close associate of Putin’s, will attend today’s signing of the memorandum of cooperation.

Leading up to today’s agreement, ELPE managing director Grigoris Stergioulis had traveled to Moscow in April for meetings with highly ranked Rosneft officials, in search of closer trading relations.

Three years ago, Rosneft, whose trading activity with ELPE stretches back a long way, had publically expressed an interest – through Valentina Matviyenko, Chairman of the Federation Council, during a news conference – to acquire a stake in the Greek refinery.

Matviyenko, who, at the same news conference, was asked about Gazprom’s withdrawal from an international tender concerning the sale of DEPA, the Public Gas Corporation, had responded openly and attributed the disruption to European Commission intervention.

Though the prospect is still at at a premature stage, government officials have not ruled out the possibility of Russian officials retabling their interest in ELPE during the current Putin-led visit. TAIPED, the State Privatization Fund, holds the Greek State’s 35 percent share of ELPE, one of 19 privatizations published in the government gazette just days ago.

Putin, in an article of his published yesterday by Greek daily Kathimerini, implied that Russia wants the EU to treat it on equal terms with European companies.

It is still too early to make any assumptions on ELPE’s prospective privatization, a complicated issue that will take about two years to unravel. ELPE is intertwined with DEPA. ELPE holds a 35 stake in DEPA. The privatization of one depends on that of the other, as was made clear when the country’s previous administration looked at the issue.


No major energy developments expected during Putin’s visit

Developments concerning the energy sector during Russian president Vladimir Putin’s two-day official visit to Greece tomorrow and Saturday will be limited to the signing of memorandums of cooperation on low-priority matters, according to energypress sources.

ELPE (Hellenic Petroleum) and Russian petroleum group Rosneft are expected to sign a memorandum of cooopertion. So, too, is CRES, the Center for Renewable Energy Sources and Saving, locally acronymed KAPE, with its Russian counterpart.

As part of ELPE’s new framework of cooperation with Rosneft, the Greek refinery will be supplied crude by the Russian petroleum company. It will be refined, primarily as diesel, and supplied to the Russian firm as partial or full payment for the crude to be supplied.

ELPE signed a similar deal with NIOC, the state-run National Iranian Oil Company. Part of an outstanding amount owed by ELPE to the Iranian company is being settled through the supply of refined petroleum products.

The collaborative effort between CRES and its Russian equivalent will entail the exchange of knowhow on renewable energy source (RES) and energy efficiency issues.

All other matters on the energy front, including natural gas pipeline proposals for the region, will remain quiet during Putin’s visit.

ELPE, Rosneft in talks for deals with bigger future prospects

Russian petroleum giant Rosneft, which, like all major players in the global oil industry, is seeking ways to compensate for losses prompted by the drastic drop in crude prices over the past year and a half or so, is currently engaged in talks with ELPE (Hellenic Petroleeum) in search of possible deals that could prove mutually beneficial.

For the time being, Rosneft is on the lookout for commercial deals in various regions, including Greece, but these could develop into strategic parnerships, certain sources believe.

According to sources, ELPE officials were in Moscow about a fortnight ago to hold talks with leading officials at Rosneft, Russia’s biggest petroleum industry. Its production fell by an estimated 0.7 to one percent last year as a result of the crude price collapse.

The talks included proposals for Rosneft and ELPE to purchase various petroleum products from each other, based on their respective surplus and deficit amounts for products, the sources said.

The meeting was the first between the two sides. Follow-up talks are expected in the immediate future, the sources added, while noting that an agreement, should it be reached soon, could be announced by Russian President Vladimir Putin during his upcoming official to Athens, scheduled for May 28.

At present, the Russian State holds a 62 percent stake of Rosneft, but a 19.5 percent share is up for sale as part of a new round of privatizations launched by Moscow.

Despite the difficulties encountered as a result of the crude price drop, Rosneft remains a powerful corporation. Last year, it reported an improved EBITDA figure, up 17.8 percent, and a net profit increase of two percent.

A substantial cost-cutting initiative implemented by Rosneft helped bring about these figures. The company held back on new drilling projects and is also looking for profitable ventures in other regions, including Greece.

Rosneft had first expressed an interest in ELPE back in 2013, through Valentina Matviyenko, officer of the Upper House of Russia’s parliament, the country’s third-highest position.