TAIPED

Brussels backs TAIPED tender relaunch for South Kavala UGS

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The European Commission has endorsed Greek privatization fund TAIPED’s intention to relaunch a failed tender for the development of “South Kavala”, an almost depleted natural gas field in the Aegean Sea’s north, as an underground natural gas storage facility (UGS) that would, under the new plan, also be equipped to store hydrogen.

Brussels’ decision on the South Kavala UGS has been included in a just-published European Commission post-program surveillance report covering the state of the Greek economy and its developments.

TAIPED declared that the South Kavala UGS had ended without a result in March. At the time, the privatization fund also noted it would assess international gas market conditions, taking into account circumstances created by Russia’s invasion of Ukraine, as well as the European Commission’s REPowerEU decisions, to decide on whether it would relaunch the South Kavala UGS tender in the short term.

As previously reported by energypress, TAIPED has submitted an application to Brussels to have the UGS included on the European Commission’s project-supporting PCI list, as a facility also equipped to store hydrogen.

PCI listing sought for ‘South Kavala’ UGS after failed tender

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TAIPED, Greece’s privatization fund, is seeking to reignite investor interest in “South Kavala”, an almost depleted natural gas field in the Aegean Sea’s north, through inclusion in the European Commission’s project-supporting PCI list, as a prospective underground natural gas storage facility (UGS) that would now also be equipped to store hydrogen.

This move by TAIPED comes following a recently-expired tender’s failure to attract binding bids for the UGS’ development and operation over a 50-year period.

According to sources, the privatization fund submitted its PCI application to Brussels last week, in an effort to keep this UGS project alive. PCI listings promise financial support for EU projects of common interest.

TAIPED, through this latest initiative, aims to rekindle the interest of investors, especially domestic and international business groups moving to develop projects for production and transmission of hydrogen.

Industry experts believe a new “South Kavala” tender could be launched next year if the facility secures a PCI listing.

The just-ended tender, which failed to attract binding bids from two final-round qualifiers, Energean and a partnership that brought together gas grid operator DESFA and construction company GEK Terna, was launched in June, 2020 and expired last month, on March 31.

New deadline extension likely for South Kavala UGS tender

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A tender being staged by privatization fund TAIPED for the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, being offered for development and operation of a prospective underground natural gas storage facility (UGS) over a 50-year period, is in danger of ending without a result.

The tender expires tomorrow, following a four-month extension, but its final-round qualifiers do not appear likely to submit binding bids.

A fruitless tender for what is viewed as vital energy-sector infrastructure would blemish the government’s pre-election campaign, so a further deadline extension of a few months is possible for the procedure, launched in June, 2020.

If so, the tender’s two final-round qualifiers, Energean and a partnership bringing together gas grid operator DESFA and construction company GEK Terna, will have more time to evaluate the terms and conditions.

A 50 percent socialization rate set by RAE, the Regulatory Authority for Energy, concerning the project’s regulated tariffs has been deemed as unsatisfactory by the suitors and is the key factor subduing their interest.

 

South Kavala UGS tender likely to conclude without result

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A deadline for the submission of binding bids in a tender staged by privatization fund TAIPED for the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, being offered for the development and operation of a prospective underground natural gas storage facility (UGS) for a 50-year period, has been finalized for November 28, approximately two-and-a-half years after the tender was announced, energypress sources have informed.

However, the tender’s two final-round qualifiers – Energean and a partnership bringing together gas grid operator DESFA and construction company GEK Terna – have complained related pricing regulations are far from making the investment viable. Subsequently, the participants will most likely not submit binding bids, sources closely following the procedure have noted.

If so, the tender will most likely be declared inconclusive, setting back the country’s plan for a domestic UGS. Its gas storage capacity would offer crucial protection for Greece against international market price volatility.

Officials representing the energy ministry, TAIPED and RAE, the Regulatory Authority for Energy, held a meeting last week on the South Kavala UGS, where a decision was reached to complete the ongoing tender as soon as possible, with the current pricing regulation intact.

The tender for the South Kavala UGS was launched by TAIPED in June, 2020.

Clarity on Larco, South Kavala UGS privatizations by end of July

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The fates of two long-running privatizations, state-controlled nickel producer Larco and the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, being offered through a tender for the development and operation of a prospective underground natural gas storage facility (UGS), are expected to be cleared up by the end of July, privatization fund TAIPED’s chief executive Dimitris Politis has informed.

Also, the completion of gas company DEPA Infrastructure’s sale to Italian company Italgas is expected by September, along with new sale alternatives for the DEPA Commercial sale, whose initial procedure was officially terminated in May as a result of complications stemming from an ongoing legal battle between the company and fertilizer producer ELFE, the TAIPED official noted.

The “South Kavala” UGS tender’s final round has been held up as a result of objections raised by participants over project pricing regulations established by RAE, the Regulatory Authority for Energy. These regulations are expected to soon be published in the government gazette.

Energean and a partnership bringing together gas grid operator DESFA and construction company GEK Terna are the final-round qualifiers of the “South Kavala” UGS tender.

Larco sale participants have been set a July 29 deadline for binding bids, Politis, the TAIPED chief, informed.

As for the DEPA Infrastructure sale procedure, hurdles have been removed as a result of revisions separating certification requirements set by RAE, the Regulatory Authority for Energy, for the gas company’s distribution subsidiaries from the DEPA Infrastructure sale.

Alternative plans for the ill-fated DEPA Commercial sale, including a possible partial privatization, will be announced by September or October, the TAIPED chief informed.

TAIPED, Kavala UGS bidders call for greater user funding

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Greece’s privatization fund TAIPED and the final-round bidders in a tender offering the development and operation 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 have called for an increase of the project’s funding by energy network users to a degree of as much as 100 percent, from a level of 50 percent proposed by RAE, the Regulatory Authority for Energy.

This call for the project’s greater funding percentage by energy network users was expressed by TAIPED and the sale’s two candidates – Energean and a partnership bringing together gas grid operator DESFA and construction company GEK Terna – during consultation staged by RAE.

The project’s increased funding percentage by energy network users would ensure its sustainability, while, on the contrary, the risk level would be high, the tender’s final-round qualifiers noted.

RAE’s consultation covered the UGS project’s pricing framework and DESFA’s ten-year development plan from 2022 to 2031.

 

DEPA Commercial sale over, DEPA Infrastructure completion June

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Privatization fund TAIPED’s attempted sale of gas company DEPA Commercial is officially over, the European Commission admitting that the procedure cannot proceed as a result of an ongoing legal battle between the company and fertilizer producer ELFE, which, Brussels noted, in a report on the Greek economy, is expected to take two to three years to be resolved.

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.

TAIPED is now examining alternative sale solutions, according to the Brussels report.

As for the yet-to-be-finalized sale of gas company DEPA Infrastructure, acquired by Italgas, Europe’s second largest gas distributor, it is expected to be finalized in mid-June, the European Commission’s report noted.

The Brussels report made no mention of recent certification issues raised by RAE, the Regulatory Authority for Energy, which has changed its stance on the certification conditions for DEPA Infrastructure’s three subsidiaries, the gas distributors EDA Attiki, EDA THESS and DEDA.

DEPA Infrastructure sale facing hurdle on final stretch

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The yet-to-be-finalized sale of gas company DEPA Infrastructure, acquired by Italgas, Europe’s second largest gas distributor, has encountered a hurdle on the final stretch as a result of certification issues raised by RAE, Greece’s Regulatory Authority for Energy.

The unexpected issues faced by this privatization, promising to provide 733 million euros to TAIPED, the country’s privatization fund, are serious and threaten to derail a sale and purchase agreement signed last December by the two sellers, the Greek State and Hellenic Petroleum (ELPE), and the Italian buyer.

The sale’s procedure had progressed swiftly, leading to competition committee approval, but events over the past few days, instigated by RAE’s change of stance on the certification conditions of DEPA Infrastructure’s three subsidiaries, the gas distributors EDA Attiki, EDA THESS and DEDA, have suddenly led to confusion, bringing the sale to a standstill.

RAE has offered conditional certification for the three subsidiaries, setting terms that did not exist in the lead-up to the sale and its conditions, according to sources.

Consequently, certification offered to the subsidiaries will not be considered valid if the buyer proceeds with an equity capital increase within three years of the DEPA Infrastructure sale’s finalization. Also, the agendas of all three subsidiaries will need to remain unchanged for their certification to remain valid, according to the sources.

TAIPED officials are believed to have been angered by these initiatives, considering them to be beyond RAE’s authority. Officials at Greece’s finance and energy ministries, as well as Italgas, have also been annoyed by RAE’s decision.

TAIPED and Italgas officials are believed to be engaged in talks in search of a compromise solution.

 

Kavala UGS privatization delay, DEPA Commercial sale on hold

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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

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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

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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 close to decision on Kavala UGS pricing regulations

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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.

Legislative revision ends saga for sale of PPC 17% stake

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Power utility PPC’s long-running saga concerning the privatization of a 17 percent stake has ended following a legislative amendment submitted by the finance ministry to facilitate the process.

The step was supposed to have been taken in 2012, during the country’s first bailout agreement. The then-government ran out of time and ended up transferring the 17 percent stake to privatization fund TAIPED in 2014.

Two years later, in 2016, EESYP, the super privatization fund, was established, to which the Greek State transferred the other 34 percent stake it held in PPC.

From that period onwards, a variety of scenarios concerning the sale of PPC’s 17 percent came and went, covering the entire period of Greek bailouts.

In the post-bailout era, the current government wanted PPC, following its financial restructuring, to play a leading role in the energy transition. As a result, last autumn, a decision was made to proceed with an equity capital raise at PPC that would result in a total stake reduction to 34 percent for the two privatization funds, TAIPED and EESYP.

The recent equity capital raise resulted in EESYP, the super privatization fund, having a PPC stake of 23.8 percent stake, down from 34 percent, and TAIPED, the other privatization fund, having a 10.32 percent stake, down from 17 percent.

 

Copelouzos group enters DEPA Infrastucture alongside Italgas

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The Copelouzos Group is set to acquire a minor stake in Italgas’ 100 percent acquisition of DEPA Infrastructure, to be completed tomorrow when Italgas is expected to sign a final agreement with Greek privatization fund TAIPED.

The Copelouzos Group is expected to acquire a stake of between 10 and 20 percent in DEPA Infrastructure through Faethon, a group company controlled by family member Elmina Copelouzou.

The Copelouzos Group and Italgas had reached an agreement on this partnership while the DEPA Infrastructure tender was still in progress.

The total value of the DEPA Infrastructure acquisition by Italgas is worth 940 million euros, making it one of the biggest deals reached in Greece in recent years.

The 100 percent privatization of DEPA Infrastructure comprises 100 percent of gas distributor EDA Attiki, covering the wider Athens area; 100 percent of gas distributor DEDA, representing all other areas in Greece except for Thessaloniki and Thessaly; as well as a 51 percent stake in gas distributor EDA THESS, covering the Thessaloniki and Thessaly areas.

As its next step, Italgas will also buy the remaining 49 percent of EDA THESS following a decision by Eni Gas e Luce to sell this stake.

DEPA Commercial privatization decision expected in January

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A decision on whether to defer the final binding-bids stage in the 100 percent privatization of gas company DEPA Commercial is not expected until January, according to sources. Officials are delaying the progress of this sale fearing negative impact that could stem from the energy crisis and an unresolved legal dispute between the gas company and fertilizer industry ELFE.

The country’s privatization fund TAIPED is waiting to see how the government decides to move ahead on a number of issues, and is also awaiting the stance of ELPE (Greek Petroleum), which holds a 35 percent stake in DEPA Commercial, before reaching a decision, the sources noted. TAIPED controls the Greek State’s 65 percent share of DEPA Commercial.

Though the legal dispute between DEPA and ELFE could drag on for months, the DEPA Commercial sale has not been put on hold as authorities are pursuing a solution, according to TAIPED sources.

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

On the other front, ELPE is likely to seek to sell its 35 percent share of DEPA Commercial regardless of what the government and TAIPED decide to do with their 65 percent share, sources informed.

One alternative being contemplated is to divide DEPA Commercial so as to enable the sale of subsidiary gas supplier Fysiko Aerio Elladas. Another possibility examined by TAIPED is to list DEPA Commercial on the Athens Stock Exchange, though this is seen as highly unlikely given the insecurity the ongoing ELFE legal case would cause among investors.

Gas network upgrade cost in north crucial for UGS sustainability

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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.

Major investment interest in PPC equity capital increase

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Power utility PPC’s equity capital increase, planned for late October, is expected to attract over one billion euros, in excess of the 750 million-euro amount initially announced, strong interest by foreign institutional investors, including major US interest, as well as dozens of meetings lined up for the coming weeks with potential participants, has indicated.

The next fortnight or so is expected to be filled with non-business news concerning PPC’s equity capital increase, the related topics to include discussion on possible participants, as well as political debate over the equity capital increase, effectively a partial privatization that will result in a decrease of privatization fund TAIPED’s current stake in the company from 51 percent to 34 percent.

The development promises to free the utility from restrictions imposed on state-controlled companies, boost its finances and enable the company to further consolidate its position as the dominant market player. Small and big energy players are expected to be impacted by the PPC move. Talk of takeovers is already brewing.

The equity capital increase, along with PPC’s not-yet-finalized sale of a 49 percent stake of distribution network operator DEDDIE/HEDNO, a subsidiary, to Australian fund Macquarie for 2.116 billion euros, will offer crucial financial support for PPC’s 8.5 billion-euro investment plan covering the next five years. Green energy production and ventures abroad are the plan’s key objectives.

PPC chooses FMO for equity capital increase, more potential

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Power utility PPC’s equity capital increase, announced last Friday, will be staged as a free market offer (FMO) procedure with accelerated book building, meaning that the discount at which the equity capital increase will be held will be determined by the offers to be submitted to the issue’s book.

Also, PPC will be able to announce a bigger equity capital increase should oversubscription be achieved.

The administration’s decision to opt for an FMO procedure rather than a customary method of pre-determined prices is expected to create competition among participants, which could produce a better result, both in terms of the discount and funds to be drawn, officials explained.

PPC will be able to revise, upwards, its 750 million-euro equity capital increase if the procedure is oversubscribed, the officials added.

The power utility’s administration began talks with prospective participants of the equity capital increase last Friday and will continue these talks until the end of October, when the book building procedure will commence.

PPC is aiming to attract 750 million euros. The procedure will result in a decrease of privatization fund TAIPED’s current stake in the company from 51 percent to 34 percent.

 

 

PPC planning equity capital increase, big funds involved

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Power utility PPC will proceed with a 750 million-euro equity capital increase, effectively a partial privatization coming twenty years after a previous round at the bourse that will result in a decrease of privatization fund TAIPED’s current stake in the company from 51 percent to 34 percent.

The company administration’s step back for a minority share, plus management, aims to maximize the participation of foreign institutional investors, who, along with local investors, are expected to easily cover the equity capital increase’s financial demands.

US, British and northern European funds are among the interested parties, private talks held over the past six months, at least, have indicated, energypress sources informed.

Blackrock, EBRD, Fidelity, Apollo, Carmignac, Twenty Four AM, Bluecrest, Pictet, Union Investments, Sona Asset Management, Barings, Aperture, Saba Capital and Vontobel are funds that could be involved, it is believed.

The equity capital increase paves the way for the influx of capital that will contribute to PPC’s 8.4 billion-euro investment plan until 2026, currently ranked as the most ambitious in the Greek market.

Besides the installation of RES units with a total capacity of 8.1 GW, PPC also aims to branch out into the Balkans, beginning with projects in Romania and Bulgaria.

Romania’s RES market is growing at an annual rate of 8 percent, the country’s objective being to reach an installed capacity of 6 GW by 2030. Bulgaria’s RES market is growing at an even greater rate, 15 percent. The neighboring country’s objective is to have installed a further 3 GW by 2030.

DEPA Comm., ELFE appeals this week, key for privatization

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An Athens Court of Appeal will, on Thursday, hear three appeals submitted by gas utility DEPA and fertilizer industry ELFE following a Court of First Instance verdict in 2019 concerning an ongoing legal dispute between the two companies.

ELFE is seeking 302 million euros in compensation from DEPA, contending the gas company overpriced gas supply between 2010 and 2015.

DEPA has also filed a case seeking 86.7 million euros from the fertilizer producer, based in Kavala, northern Greece, in overdue amounts. The Court of First Instance had issued a verdict trimming this amount to 60 million euros. It is now the turn of the Athens Court of Appeal to decide.

Much attention is being paid to this case as, should it drag on, it could impact the ongoing 100 percent privatization of DEPA Commercial. In addition, a decision vindicating ELFE can be expected to also prompt other gas consumers to file overpricing cases against DEPA.

If the legal battle is prolonged, TAIPED, the privatization fund, could temporarily shelve the privatization until a final legal decision is reached. Another option being considered by the government is for the Greek State to cover any resulting compensation claims if ELFE is vindicated, as a form of guarantee for the prospective buyers.

The Greek State’s 65 percent stake is being offered by TAIPED, the privatization fund, and Hellenic Petroleum ELPE is also selling its 35 percent stake.

Big week for energy privatizations, approaching finales

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It is a big week for the country’s energy privatizations with gas company DEPA Infrastructure’s tender set to reach a concluding stage tomorrow and that of distribution network operator DEDDIE/HEDNO also approaching its finale as its binding bids are scheduled to be opened on Friday.

Italgas, Italy’s biggest natural gas distribution company and the third largest in Europe, has, according to sources, submitted the highest bid in the DEPA Infrastructure sale, offering an 100 percent stake, and is the only bidder to which the privatization fund TAIPED has extended a request for an improved offer, by tomorrow.

The Italgas offer is believed to be close to 700 million euros, a figure expected to rise further, and well above an offer submitted by rival bidder EPH from the Czech Republic.

As for the privatization of DEDDIE/HEDNO, a power utility PPC subsidiary, four binding offers, for a 49% stake, have been submitted by major international funds CVC Capital Partners Group, First Sentier Investors Group, KKR Group, and the Macquarie Group. This level of participation could boost bid levels. Offers of over 1.5 billion euros, or even 1.7 billion euros, could be unveiled, sources have anticipated.

The rebounding economy, potential of Greece’s energy market, as well as the statures of all five suitors involved in the two sales could result in two of the country’s most lucrative privatization agreements, in all sectors.

Italgas, DEPA Infrastructure’s top bidder, step from acquisition

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Italgas, Italy’s biggest natural gas distribution company and the third largest in Europe, is now one step away from acquiring Greece’s DEPA Infrastructure as, according to energypresss sources, it has submitted the highest bid in the DEPA Infrastructure sale and is the only bidder to which the privatization fund TAIPED has extended a request for an improved offer, by September 8.

The Italgas offer is believed to be close to 700 million euros, a figure expected to rise further, and well above an offer submitted by rival bidder EPH from the Czech Republic.

The preferred bidder may be officially announced on September 9. The sale procedure is expected to be finalized by the end of the year as national and European authorities will need to re-certify DEPA Infrastructure as a natural gas network operator under its new ownership to emerge from the sale.

The 100 percent privatization of DEPA Infrastructure comprises 100 percent of gas distributor EDA Attiki, covering the wider Athens area; 100 percent of gas distributor DEDA, representing all other areas in Greece except for Thessaloniki and Thessaly; as well as a 51 percent stake in gas distributor EDA THESS, covering the Thessaloniki and Thessaly areas.

The preferred bidder will also submit an offer for the remaining 49 percent stake in EDA THESS, based on an agreement reached between TAIPED, the privatization fund, with Italy’s Eni Gas e Luce, the current holder of this minority stake.

As a result, DEPA Infrastructure’s winning bidder stands to become the sole stakeholder in the three gas distribution companies.

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

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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.

Mid-October bidding deadline for assets leased to Larco

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Privatization fund TAIPED will, according to sources, set a mid-October deadline for binding bids concerning the privatization 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).

Six interested parties are participant in the tender. These are:

  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

DEPA Infrastructure bidder legal files opened ahead of offers

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Privatization fund TAIPED has opened first-stage files carrying legal documents submitted by two bidders, Italy’s gas network operator Italgas and the Czech Republic’s EP INVESTMENT ADVISORS, for the 100 percent sale of gas company DEPA Infrastructure.

This is the first step before the financial offers submitted by the two bidders are opened.

TAIPED officials are now examining the legal documents in case any clarification is needed before the sale’s procedure advances to the second and final stage, when the financial offers are opened, probably towards the end of August or early September.

The possibility of the bidders being asked to improve their offers has not been ruled out.

 

DEPA Infrastructure sale’s July 15 deadline confirmed, 2-3 bids expected

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Privatization fund TAIPED has decided to keep unchanged a July 15 deadline for binding bids concerning the 100 percent sale of gas company DEPA Infrastructure, meaning this privatization procedure, now 17 months long, has hit the final stretch.

The Greek State is selling its 65 percent stake in DEPA Infrastructure and Hellenic Petroleum (ELPE) the other 35 percent.

The deadline date was reconfirmed following the energy ministry’s settlement of pending issues.

Just days ago, a legislative revision was ratified to grant 30-year license extensions to the EDA distribution companies, DEPA subsidiaries.

Also, a rule enabling the removal of geographical areas from the control of EDA companies if delays in their development of distribution networks in these areas have reached 18 months will not be applied if the EDA companies are found to not be responsible for these delays.

Moreover, the legislative revision has introduced a new mechanism enabling required revenue recovery underperformance by one of the country’s three EDA distribution company to be covered by the other EDA companies, through revenue offsetting procedures concerning equivalent periods.

If this procedure fails to resolve required revenue recovery underperformances, then any discrepancy will be covered through price adjustments at all three EDA companies.

A total of six participants have qualified for the final round of the DEPA Infrastructure sale. According to sources, two or three suitors are seen submitting binding bids in just over a week, but this remains to be confirmed.

The six qualifiers are:

  • EP INVESTMENT ADVISORS
  • FIRST STATE INVESTMENTS (European Diversified Infrastructure Fund II)
  • ITALGAS SpA
  • KKR (KKR Global Infrastructure Investors III L.P.)
  • MACQUARIE (MEIF 6 DI HOLDINGS)
  • SINO-CEE FUND & SHANGHAI DAZHONG PUBLIC UTILITIES (GROUP) Co., Ltd consortium.

 

Greek State to no longer control majority of ELPE board

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Privatization fund TAIPED’s deferral, by a week, for May 28, of revisions concerning Hellenic Petroleum ELPE’s corporate agreement and green-focused transformation plan highlights the difficulties faced in the effort to find a right balance between the petroleum group’s two main shareholders, the Latsis group’s Paneuropean, holding a 47 percent stake, and the Greek State, holding a 35.5 percent stake.

The Greek State’s presence on ELPE’s 11-member board is expected to be reduced from seven, at present, to four on the new board, following fears of an even smaller presence.

Paneuropean supports the revisions and is expected to endorse them at the general shareholders’ meeting on May 28.

The main opposition Syriza party has intensified its criticism of the government’s handling of the ELPE plan, accusing the administration of putting the Greek State’s interests at stake.

The government will do what it must to ensure the interests of the Greek State as well as ELPE, so that the company may contribute to further economic growth in Greece, energy minister Kostas Skrekas noted earlier this week.

DEPA Infrastructure bids July 16, Commercial sale delayed

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Privatization fund TAIPED has set a July 16 deadline for binding bids concerning the sale of a 65 percent stake in gas company DEPA Infrastructure.

This sale represents Greece’s only energy-sector privatization proceeding as planned, based on the fund’s updated Asset Development Plan.

A total of six bidding formations have qualified for the privatization’s second round. They are: EP INVESTMENT ADVISORS; FIRST STATE INVESTMENTS (European Diversified Infrastructure Fund II); ITALGAS SpA; KKR (KKR Global Infrastructure Investors III L.P.); MACQUARIE (MEIF 6 DI HOLDINGS); SINO-CEE FUND & SHANGHAI DAZHONG PUBLIC UTILITIES (GROUP) Co., Ltd.

On the contrary, TAIPED has decided to delay bids for the sale of gas supplier DEPA Commercial until the third quarter of this year as a result of the company’s ongoing legal dispute with ELFE (Hellenic Fertilizers and Chemicals).

DEPA Commercial has challenged an Athens Court of First Instance verdict that ordered the company to return 61 million euros to ELFE for alleged overcharging between 2010 and 2015. The appeal has been deferred for September and may be jointly heard with a separate case involving the two companies over a similar amount of unpaid receivables that is allegedly owed by the fertilizer and chemicals producer to DEPA.

The DEPA Commercial sale, offering the Greek State’s 65 percent stake of the company, has attracted all the country’s major energy players as well as foreign companies.

Seven bidders are participating: C.G. GAS LIMITED (Copelouzos group); MET HOLDING AG; SHELL GAS B.V.; GEK TERNA; ELPE & EDISON INTERNATIONAL HOLDING N.V.; Motor Oil Hellas & PPC; and Mytilineos.

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

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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

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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.